UK

Barclays Spending Millions On Teaching Its Bankers 'Truthfulness'

04/07/2014 11:26 BST | Updated 04/07/2014 11:59 BST

Barclays, which is battling allegations of "toxic" fraud in the US, is going to spend millions teaching its staff principles such as "truthfulness" in a bid to improve standards at the bank.

This comes as UK Treasury minister and former senior Barclays banker Andrea Leadsom warned that there was "still a lot of baggage" in the financial industry, with more "cringeworthy announcements" yet to come about City scandals.

Barclays will set up the Compliance Career Academy, which will be staffed by academics ranging from lawyers to philosophers, in order to train 2,100 relevant staff on subjects like "truthfulness" and "What is Compliance?"

The British banking giant already spends around £300 million a year on compliance and the new academy, which is being launched in association with Cambridge Judge Business School, is understood to be having millions more spent on it.

"Other people are hiring arms and legs. We're investing in brains," said Michael Roemer, head of compliance at Barclays.

Barclays chairman David Walker said: "We have a Barclays way, guidance on the way we want people to conduct themselves, that has to be embedded in the business."

"If we can't embed it from the top to the bottom we will have failed. I am sorry to say there will be accidents. They are not evidence of the failure of what we are rolling out, they are indicative that it takes time."

This comes after the US authorities filed a lawsuit for securities fraud against Barclays, amid allegations that it misled large institutional investors and other clients in the United States by falsely telling them it was taking measures to protect them from predatory high-frequency traders.

A Barclays spokesman said: "We take these allegations very seriously. Barclays has been co-operating with the New York Attorney General and the SEC (Securites and Exchange Commission) and has been examining this matter internally. The integrity of the markets is a top priority of Barclays."

The complaint, filed in state Supreme Court, portrays "a flagrant pattern of fraud, deception and dishonesty with Barclays clients and the investing public," New York's attorney general Eric Schneiderman said.

The lawsuit alleges Barclays deceived investors about its dark pool, an electronic trading operation intended to shield them from the high-frequency traders who use sophisticated computer programmes to get early access to pending orders and other market-moving information.

The bank promoted a service it claimed was a "surveillance" system that would identify and hold accountable "toxic," ''predatory" and "aggressive" traders, the lawsuit says.

Meanwhile, City minister Andrea Leadsom told the House Magazine that there was still a long way to go to change the culture in the City.

Asked whether the City "gets it" and is learning the lessons of the financial crisis, she said: "I would say that at the top echelons of the banks, absolutely.

"But I think there's quite a long way to go to really change the culture. I think it did become very transaction-oriented and I think it will take time to recover that. I think we are still going to see a lot of cringeworthy announcements."

"There's no doubt that the leaders of the City are absolutely keen as mustard to be looking much more at what they can put into society, how they can do things better, how they can make amends."

Reflecting on her time at Barclays, Leadsom said that she took the view "the money market guys were the honest ones with the cardigans and beards" who would "never fiddle anything".

"So the day we heard about the Libor rigging, I just though 'well if Libor is rigged then what wasn't rigged?'"