Barclays PLC (NYSE:BCS) (LON:BARC) announced yesterday that the bank’s compliance chief, Hector W. Sants, will seek to recuperate from exhaustion and stress by taking a leave of absence effective immediately. Following the rate-rigging scandal that rocked the bank and premiership sponsor, Barclays called on the former head of Britain’s financial regulator to right its ship in January.
Public’s mistrust in Barclays
Following the Libor debacle, Barclays PLC (NYSE:BCS) (LON:BARC) was left rudderless on a sea of public mistrust. The bank looked to the former chief executive of the Financial Services Authority to scratch back a modicum of public trust, and Mr. Sants did well with the limited time he was able to work. He certainly did better for Barclays then he did as chief executive of the FSA; the failure of the British mortgage lender Northern Rock came on his shift.
During the financial crisis, Mr. Sants, a former Credit Suisse Group AG (NYSE:CS) banker, was also part of the talks with Barclays PLC (NYSE:BCS) (LON:BARC) that prevented it from buying some European assets from the collapsing Lehman Brothers.
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In 2010, Mr. Sants famously claimed that he would retire from the financial regulator, but a few months later the government announced that it had reached an agreement with Mr. Sants that would keep him on-board during a major and much needed overhaul of the British Regulatory system. A system that, like its counterpart in the United States, seems to have been taken by surprise when the financial crisis first hit.
Hector W. Sants’ work with Barclays
When Mr. Sants first came on at Barclays PLC (NYSE:BCS) (LON:BARC), his first task was to review the bank’s risk-taking and tighten compliance following a fine of over $450 million from the British government last year. The fine came after it became clear that Barclays played a pivotal role in the manipulation of the benchmark London interbank offered rate, or Libor. Mr. Sants in his role as compliance chief worked long and hard with chief executive Antony P. Jenkins, and it was rare for the latter to appear in public without Mr. Sants at his side.