The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
BANKING

New bank failures revive break-up calls

Just when you thought banks’ reputations couldn’t get any worse, their standing collapses almost completely. The recent travails of JPMorgan, Barclays and HSBC will adversely affect the whole industry and raise demands to cut big banks down to size once again. But in tackling banks’ problematic complexity, let’s not forget the benefits of diversification.

July was a desperate month for some of the world’s biggest banks. Bob Diamond, the former chief executive of Barclays, answering questions about the rigging of Libor rates, found members of a UK Commons Treasury select committee raising doubts about his capacity for accurate recall. Quite aside from the furore about what Bank of England deputy governor Paul Tucker meant and who said what to whom about Libor in the teeth of the crisis, there is clear evidence of a cartel of traders at Barclays and several banks attempting to rig the interest rate derivatives markets in ways that carry the worst echoes of Ivan Boesky in the 1980s.

At JPMorgan, chief executive Jamie Dimon had to confess that the firm had previously overstated its first-quarter net income by $459 million and was now restating its numbers because of new doubts over some traders’ marks on the infamous synthetic credit positions taken inside the loosely controlled chief investment office division. These have so far run up $5.8 billion of losses that might yet rise by as much as another $1.7 billion.

HSBC found itself hauled before a US Senate Permanent Subcommittee investigating money laundering and forced to acknowledge that its controls, particularly of its Mexican subsidiary, "could and should have been stronger".

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree