Barclays Bank has been charged with “unlawful financial assistance” relating to billions of pounds it raised from Qatar at the height of the financial crisis a decade ago.
Reuters says that public companies in Britain “are normally prohibited from lending money for the purchase of their own shares, a process known as financial assistance”.
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A five-year investigation into the deal by the SFO last year charged the bank’s parent company Barclays PLC and several former executives with conspiracy to commit fraud, “but the move to charge Barclays Bank as well is significant because it holds the banking licence that allows it to operate in different countries”, says the BBC.
If the bank is found guilty, it could lose that crucial licence.
Yesterday’s decision to charge the bank itself is “significant”, says the BBC’s business editor Simon Jack: it makes Barclays the first British bank to face a criminal trial relating to its conduct during the financial crisis.
But the long-term implications are less clear. As indicted by a rise in the bank’s share price on yesterday, “being charged in itself isn’t a problem”, says Jack.
“This incident was ten years and four management teams ago, it was done in order to save the bank (and the taxpayer billions). Even if convicted there are banks (UBS, BNP, Credit Suisse) who have been convicted and continued operating,” in a sign that Barclays can weather the current storm, he adds.