The Bank That Lived a Little: Barclays in the Age of the Very Free Market

by Philip Augar

Based on unparalleled access to those involved, and told with compelling pace and drama, The Bank that Lived a Little describes three decades of boardroom intrigue at one of Britain's biggest financial institutions. In a tale of feuds, grandiose dreams and a struggle for supremacy between rival strategies and their adherents, Philip Augar gives a riveting account of Barclays' journey from an old Quaker bank to a full-throttle capitalist machine. The disagreement between those ambitious for Barclays to join the top table of global banks, and those preferring a smaller domestic role more in keeping with the bank's traditions, cost three chief executives their jobs and continues to divide opinion within Barclays, the City and beyond. This is an extraordinary corporate thriller, which among much else describes how Barclays came to buy Lehman Brothers for a bargain price in 2008, why it was so keen to avoid taking government funding during the financial crisis, and the price shareholders have paid for a decade of barely controlled ambition. But Augar also shows how Barclays' experiences are a paradigm for Britain's social and economic life over 30 years, which saw the City move from the edge of the economy to its very center. These decades created unprecedented prosperity for a tiny number, and made the reputations of governments and individuals but then left many of them in tatters. The leveraged society, the winner-takes-all mentality and our present era of austerity can all be traced to the influence of banks such as Barclays. Augar's book tells this rollercoaster story from the perspective of many of its participants—and also of those affected by the grip they came to have on Britain.

Genres: Finance, Business, Nonfiction, Economics, History, Banking

448 pages, Paperback

First published July 5, 2018

Reviews

[Laura Spira · Rating 4 out of 5]

There is something fascinating about the rise of this literary genre which takes the lid off the world of finance, offering some insights into the thinking of the people involved in events that can blossom into full-blown scandals. I remember being very impressed by "Barbarians at the Gate" and "Liars' Poker" when they were first published and there has been a steady stream of such books since then, some turned into compelling films like "The Big Short" and "The Smartest Guys in the Room".

Augar's book seems to me to be a cut above the rest. It's very well written. The underpinning research is impressive and he has made very good use of the extensive access he was afforded to people and papers. There is often a nuance to the books in this genre, as if the authors are saying not only "Here's the story and the facts I've discovered" but also inviting the reader to share their shock and concern about issues of accountability and the behaviour of the protagonists. Augar is very careful about positioning his analysis, which in my opinion makes this book as objective as good academic research aims to be. The reader can't help but conclude that there was a significant problem with Barclays' strategy and that the non-execs did a poor job of challenging those driving it but Augar manages to trace a path through his accumulation of factual information in such a way that the reader is led to this conclusion in small steps, rather than being presented with the full glare of the story viewed with hindsight.

The book clearly describes the dominance of a small elite group of middle-aged men over the banking industry. They are not driven by the size of their personal rewards: these serve to symbolise and reinforce their relative status. They are driven by competition. They know they are powerful but they seem to have little idea of how such power might be used to improve society. They view regulation as a constraint to be circumvented or even ignored. Although they have much in common, they are not friends and have little compunction about leaking damaging information, undermining each other in the boardroom or sacking each other. They consider themselves exclusive on the basis of their qualifications and experience: only they can fully understand the complexities of financial institutions and the challenges of the economic environment. They are not very likeable.

There are women in this story. If the diversity discourse has any real traction, you'd expect them to make a difference to board behaviour. They don't, although at least one - Alison Carnwath - tried.

The numbers are astonishing. They are juggled about with little concern for the impact on those at the bottom of the pile - the bank's retail customers. Alongside the boardroom story, Augar traces the experience of one such customer, whose business fails in large part due to the mis-selling of a complicated financial product, illustrating the way that the traditional aspects of retail banking have been undermined and also emphasising the distance and apparent disconnect between the board and the organisation's frontline activities


The relationship of the Barclays executives with their counterparts in the US is interesting. The goal of rivalling the Wall Street institutions underpins the development of the investment side of the bank but the implications of this for the organisation as a whole are not considered carefully by the board until it is too late. The clash of cultures between the US and the UK is also fundamental to the story. While wanting to harness the drive and abilities of US bankers, the board members from the UK fail to recognise problems of different communication styles. Traditional informal nods and winks of the City don't work as the regulators expect them to. The international network within which the senior bankers are enmeshed has its own culture, permeating all the banks between which they moved so easily.

The story is not over yet. Charges of fraud around the raising of the funds from Qatar that kept Barclays independent of government funding during the financial crisis have yet to be resolved. Criminal proceedings against four former senior employees will not start until next year. Augar's commentary on the unfolding story will be well-informed: I look forward to it.

[Bint Laden · Rating 4 out of 5]

This is a good book – it’s an interesting story, briskly told and the author has clearly done a lot of background work and - from my own knowledge – it’s largely accurate. It’s important for me to make that point as I’m mostly going to comment on things which are less good.

I should also add that I was there for some of the time and much involved in some of the events described in the book, so while this gives me an ‘insider’ perspective, it might also be said this is at the price of objectivity.

I’ll begin by getting one thing off my chest – I simply hate books that feel the need to say things like “[Bob Diamond] sat down in a small coffee chop, ordered a small cappuccino and stared out through the condensation dripping down the window pane”. How could Philip Augur possibly know this – he wasn’t there and nor was anyone other than Bob and, believe me, Bob did not contribute to this book. I know it’s meant to add ‘colour’ but it simply sounds naff.

More substantively some of the emphasis or lack thereof on elements within the overall story are a little odd (and perhaps betray who some of his sources were). In the early part of the book one is left with the impression that nothing of importance ever happened at Barclays without the involvement of one individual and the recruitment firm he worked for – I don’t think so.

The book rather oddly suggests that John Varley and Barclays played a bit of a blinder by pulling out of the bid for ABN Amro. The truth is, had it not been for an even bigger fool in the form of RBS, Barclays would have made the acquisition and have gone bust, as ABN was a vastly overvalued bag of nails.

The first of the huge fund raisings involving the Qataris, which was of enormous importance and has had consequences to this day, is covered in one short paragraph. Augur claims he can’t say anything about the allegations which surround the second and even larger fund raising on the grounds that the matter is ‘sub judice’ but there is no reason he could not summarise the key points and developments as they have already been reported in our newspapers.

In contrast Amanda Staveley is given far greater prominence and is treated with much greater respect than the facts warrant. I would say that her ‘contribution’ to the transaction was zero or even less than zero if that’s possible and many at Barclays considered her to be something of an embarrassment or even a joke.

There are relatively minor factual errors in the book. For example, the participants on a crucial call with Tim Geithner are incorrectly stated (I should know - I was one of them); some of the sources quoted in the notes are wrong and many are no longer available; and giving as a supporting source for quite an important statement ‘bbc.co.uk’ is simply inadequate.

The story of how Barclays came to buy much of Lehman Brothers is well told and I think an exciting story in its own right. But part of the story is a little jumbled and perhaps I can clarify this aspect. In the book it is explained that Barclays needed shareholder approval to acquire Lehman (while it was still solvent) but the US authorities wished to announced the deal on the Monday morning, so Barclays needed the US to ‘backstop’ it for weeks until a shareholder meeting could be held. This is technically correct but incomplete. The reality was the US was only being asked to provide a very theoretical guarantee in the event shareholders rejected the acquisition. I say theoretical because it was inconceivable shareholders would not approve the deal (the board would have resigned on mass had this happened and was prepared to make this clear) and in any event the large institutional shareholders would have given undertakings to vote in favour the next day, so the US risk window was extremely small.

Perhaps more important is that Barclays made a judgement that the US authorities were bluffing in saying there would be no public support for Lehman, because the consequences for the financial system in the US and more widely should Lehman go bust were too grave to accept. Barclays was both wrong and right at the same time: wrong because the Americans were not bluffing and Lehman went under but right because had the US correctly foreseen the consequences - which were traumatic and deep - it would have stepped in, as it then had to do on a much larger scale to prop up AIG just a few days later. If the concern was ‘moral hazard’ it made no sense to let Lehman go and then as a result, be forced to bail out AIG and many other institutions.

But now I’m commenting upon what is not in the book, rather than what is and what is there is an interesting and important story told well and with pace and drama.

[Jonny · Rating 4 out of 5]

If you want a robust deep dive into the state and history of UK banking, financial services, regulation and, of course, Barclays, then this is one of the best books out there for you. The detail at which this book covers key macro events such as the big bang and financial crisis, and how UK banks adapted as this environment changed is fascinating. It lets you empathise with the Banks, the Government and the Regulator in a balanced and thorough way.

That being said - if you're more interested in a pure business book than the level of detail this book goes into regarding some of the financial alchemy and concepts might then you off at parts. Thankfully I sit in the former group - so I loved this book!

[Simon Mee · Rating 1 out of 5]

The Bank That Lived A Little is the story of a big bank that wanted to be a bigger bank and really sucking at that (though not really any worse than anyone else), and the cultural friction between American and British way of doing things, which Augar diplomatically attempts to remedy by adopting Americanised spellings.

'We're right. What are you going to do about it?'

Do you like finance? No? Good, you don’t have to worry about it here.

The Bank That Lived A Little is very begrudging in explaining how the money markets work, deigning under apparent sufferance to explain what Collateralised Debt Obligation is. Instead it’s about the deals deals deals, the boardroom manoeuvring, and the high life, or at least a sanitised version of it, with ski trips, gentlemen’s clubs, and marquees on the lawns and liveried servants. Augar’s literary tics are vignettes of ostentatious displays of wealth, mixed with remarkable silences about the heroic levels of drug taking in the UK’s professional classes.

Augar’s recounting of conversations are, frankly, a bit shit. In Augar’s retellings, it might be a classic Varley call: quiet, understated and well judged, but the actual transcripts are agonisingly dull:

'I know we like Barclays. We've been in them all the way up from 500 pence when Varley took over. We love Diamond, we do a lot of business with Barclays Capital and they are one of our prime brokers. But I've been running the numbers. Barclays Capital have been using more and more capital to grow profits. The return on every dollar they invest gets lower every year, so they borrow more.'

Painful, colourless stuff.

The narrative is also mostly chronological but leaps round from incident to incident, and more races through them than actually taking the opportunity to educate the reader about, for example, British and European financial relations (try and find an instance of Brexit being mentioned in a book that finishes in 2017!).

Theoretically, there is value in The Bank That Lived A Little. We get Barclays’ version of the failed Lehmann bailout (the American retellings tend to throw Barclays under the bus). The issues of upselling and cross-selling are covered well and it is worth pointing out that inexperienced boards of directors are vulnerable to control by over-powerful chief executives/chairmen:

Broadbent apart, most non-executives still had no idea what Barclays Capital was really doing.

It had all gone too far.

In reality, there is no value in The Bank That Lived A Little.

Augar is coy over who he interviewed, and states that when he writes about what a character thought, it doesn’t necessarily meant they told him that. This is an incredible approach, as in not a credible way to do things. It shows in the biases in the narrative, the pseudonymous Charlie Bycroft becoming a silver tongued charmer as It was very artfully done, or that Bob Diamond:

joined in the banter, stood his round in the pub, but never got stupidly drunk or went on to the girlie bars.

...as though genuflection to your preferred characters is obligatory. It is more than just opinion, such as Augar’s worshipful tones about the Irish Canadian chairman Matt Barrett:

Still in his early fifties, he was unlikely to remain single for long.

…as Augar outright omits at least one material scandal during his tenure. Amanda Staveley becomes a far more substantive character than reality (and court judgement) support. It’s so unbalanced that it makes the entire narrative untrustworthy. I am sure the basic structure of events is correct, but the input and reactions of those involved in them are unreliable. Conflicting recollections of events are rarely presented, it’s all assumed Augar has the correct version and the reader should be wowed by laudatory non sequiturs such as how some Damien Hirst etchings had been bought with typical acumen just before the artist's reputation really took off.

This was not the moment to appear vulnerable.

I think there’s some morality tale in The Bank That Lived A Little about the over-competitive nature of the banking industry leading to widespread rule breaking. But, man, it is a dull and meandering journey in getting there. I found myself incredibly unsympathetic to all those involved – not necessarily over the levels of compensation or lifestyle (I’m not here to hold your hand if you’re mug enough to invest in actively managed financial products that fund their bonuses), but over the constant whinging over perceived unfair treatment or mismanagement:

Speculators cared only whether it landed on red or on black, whereas for them the survival of a three-centuries-old institution with 48 million customers and 156,000 employees was at stake.

Your characters are welcome to go off and lose 99% of a fund’s stock price over some performative white saviourism. What they don’t need is a hagiography about the time the Bank of England told them to bugger off.

[David · Rating 3 out of 5]

Another competent though rather colourless bank biography. Augar has done extensive research and is able to hone in to specific events with granular detail, in particular the decisions made during and after the Great Financial Crisis. He has chosen to focus almost exclusively on the Board and all events at Barclays are viewed through this lens. While this may make some sense given that Augar is an outsider and was not privy to what was going on inside the bank, it does omit a lot of the actual business that Barclays has done over the last 40 years and how that has changed. Many of the financial innovations that contributed to the crisis and resulted in conduct fines to the bank are presented as if they just appeared out of thin air. It is not made clear what Barclays' role was in creating these products or whether they were following what all other banks were doing at the time (Augar hints to the latter but never makes it completely explicit). This would have been important to include given that Augar mentions that he wanted to tell the story of the change in financial markets and banking in the UK through the example of Barclays, but in order to do so it is important to explain when and how those changes happened.

Augar also appears to have certain assumptions that are not fully explained. Chief among these is his view that Barclays should not have entered into investment banking to challenge the US players. Some of the reasoning is sound, including the capital intensive nature of the business and volatile returns, as well as the reputational risk following the crisis. The alternative however is not presented or justified why it would be a better strategic decision.

The timing of the publication of the book is also unfortunate as it doesn't include the outcome of the various investigations into the Qatari funding received during the crisis nor the fate of Jes Staley who had to step down following his links to Jeffrey Epstein. It would have been a fitting conclusion and in line with the various problems Barclays has had with its senior management. It seems the bank has finally managed to reach a state of stability since then, at least they have stayed off the front pages.

[Reza Amiri Praramadhan · Rating 4 out of 5]

In British banking scene, Barclay is known as a bank that lived a little. It always try to be pioneer in innovative banking practice. For example, it issued first credit card in Britain, and deployed first cash dispenser. However, this reputation of living a little means, Barclay also didn't afraid to get its hands dirty, as this book would show.

As Margaret Thatcher's government reach its neoliberalistic pinnacle, financial big bang happened in Britain as investment market was deregulated. Barclay true to its reputation, was among the first banks that also dabbled in investments. Thus, its leaders envision Barclay as Universal Bank, the one that lending money to customers while also managing investments. However, as the book go on, Barclay would turn from a bank that values its relation with the customers, into one that put profits and shareholders' satisfaction before anything else, as shareholder capitalism emerged into economy.

The shady book cooking and market manipulation, coupled with the greed of its executives, came into a crushing halt with the outbreak of Global Recession of 2008, which fueled by subprime mortgages. This caused British government to intervene, and while Barclay successfully avoided being nationalized, it earned the ire of general public after the executives giving themselves hefty bonuses just as they plunged the economy into the abyss.

As greater scrutiny was put on Barclay, its board of directors put a reform-minded executive who tried to steer Barclay away from its investment business back to its lending root. However, as the crisis passed and government loosened its grip on watching over Barclay and other banks, the unsavory culture and practice quickly returns, as Barclay slowly returning to its buccaneering ways. In the end, I don't really understand the whole book, but I get the main message that the bankers are mostly evil.

[Jenna · Rating 3 out of 5]

There are books that I have read, enjoyed, but whose contents entirely escape me now. The Bank That Lived a Little is not written to be one of those. Its mentions and stories will pop up in your thoughts for years to come.

I forget who it was, maybe Krugman (?), who said that he only wants to read about what happened/s. Not about grand theories, not about ideas, but just actual real life stuff. While I am not at that stage in my learning yet, I totally get his point and value the approach that Philip Augar has taken on that basis.

What a coincidence that I read this story of Barclays and all its myriad transitions just before Amanda Staveley's case went to trial. It is a good sign of the relevance and value of this book that it has animated elements of current events that otherwise would have gone right over my head. The story Philip Augar has to tell does not simply recede back into the pages of his book once read.

My scoring is probably really stingy - read it, it repays your attention and time!

[Dick · Rating 3 out of 5]

Its a detail account of a British bank’s recent history. Although the topic itself is pretty boring, the writing is smart and for those who works and worked there it offers some interesting perspective. However if you don’t know the people involved this book can get pretty dry and it’s not easy to keep the interest on. In some case I feel it has too much details for the average reader but too little for the expert. Ie extensive details on diamond’s paid package but little on libor scandal. Anyhow this is an interesting case study of banking, corporate culture, governance, and the transformation of uk financial landscape.

[Shivakumar Srinivasan · Rating 4 out of 5]

Of the thousands of books on the GFC of 08, this book , unlike the many others that focus on the US banks and their roles, focusses on the Story of the contemporary Barclays and the rise and fall of Bob Diamond. Filled with many anecdotes and side stories, along with detailed stories of many other players in the UK financial system, this makes up for a fairly interesting and racy read.

[Pete Wintsch · Rating 4 out of 5]

A very readable book on the transformation of banking over the last 30 years

Thoroughly good read that gives you a good feel on the transformations and tensions inside the financial sector and its regulators through the changes at Barclays

[Daniel Whittaker · Rating 5 out of 5]

This book did exactly what I expected and wanted it to do - give a detailed narrative of life at the top of a major bank in the last 30 or so years. As someone working in the industry (but not the top!) I found it to be equal parts interesting, relatable and very well told.

[Tareq Muhmood · Rating 5 out of 5]

Probably because I enjoyed 25 years in Banking, this was a compelling read of a fascinating organisation and its roller coaster journey. Insights around the Board and the management showed the reality and at times dysfunction of leadership.

[Dennis Normile · Rating 5 out of 5]

An interesting tale about Barclay’s investment banking in the last thirty years. The author leaves it up to the reader to interpret the story of Barclay’s investment banking activities. I recommend this to anyone interested in business.

[Steve Barrera · Rating 5 out of 5]

A remarkably readable book, considering that its subject is corporate boardroom politics and the evolution of the financial industry in the late 20th and early 21st century. Granted, there was some exciting stuff that happened then, and the industry was under scrutiny there for a bit, as you probably know. This book covers much of the same ground as "The Big Short," though interestingly Barclays was not bailed out by the UK government, unlike some other UK banks, after the crash in securities values. Barclays also acquired remnants of the failed Lehman Brothers in 2008, putting them front and center during the dramatic events that inaugurated the Global Financial Crisis.

Author Sir Philip Augar (knighted after the book was published), a former equities broker, begins his story in the late 1980s, and ends it with the ascendancy of CEO Jes Staley in the late 2010s. He misses Staley's embarrassing departure in 2021, but don't worry, there's plenty of reputational damage to read about, affecting other executives, the bank, and the banking industry itself. As Augar narrates it, Barclays dove head first into the new world of banking after what was called the "Big Bang" - Britain's deregulation of financial markets in 1986. The company's strategic goal became to transform from a staid retail bank of ancient pedigree into a global universal bank that combined retail and investment banking - what might be called the Wall Street model. Barclays was trying to play the big game with the big boys, where the real money was.

There was a bit of a culture clash at first, as Augar tells it. Barclays was in over its head in the 1990s. When an American executive is hired to lead the investment banking division, he discovers an environment where traders come back from lunch drunk, and the lights in the building turn off exactly at 6 PM. It's a far cry from the workaholic lifestyle on the other side of the Atlantic. Through reorganizations and the shuffling of high-level personnel, the bank eventually learns to ride the tremendous wave of growth in the financial industry, embracing all the hedging and securitization risk management tricks that led to the housing bubble and crash of the late 2000s. The bank's boardroom fell under the same groupthink spell affecting the rest of the industry, while its executives raked in huge performance-related bonuses.

After the crash - despite Barclays not receiving a government bailout - the bank still experienced reputation loss and much public opprobrium over its practices. While workers suffered through a recession, Barclays executives continued to collect multi-million pound bonuses. Fraud was exposed, and it didn't matter for the individual bank's reputation that it was industry-wide. The public had come to see banking and the banker as representative of corruption and social irresponsibility.

Augar traces this reputational journey through the experience of one bank customer, a business owner who gets burned when Barclays sells him a structured investment without fully informing him of the stakes. He begins the story as a long-time loyal customer, and leaves the bank by the end. This customer is real - Augar's narrative is constructed from extensive interviews he made with the people involved, as well as from other sources. In some cases, detailed in his introduction, he has omitted or changed names when requested, or out of respect for privacy.

The human touch is what makes this book so engrossing and such a great read. Augar embellishes his tale with occasional colorful details of individual moments that make events feel more real. For all that the story of the financial industry's exponential growth and diversification in the modern era of globalization is the saga of a rapidly evolving economic and political system, it is also a human story. It is about human beings, with human ambitions and human flaws, living their human lives.

[The Contented · Rating 4 out of 5]

Unputdownable. The most interesting book I have read for some time, with a range of perspectives.

[Ietrio · Rating 1 out of 5]

Augar is in Finance pretty much like asking the village plumber to do a kidney transplant.

[Pan Hu · Rating 3 out of 5]

Very boring narratives

[Connor S · Rating 3 out of 5]

Worth reading if only for an idea of how banking (management) works internally. Falls off near the end but fairly entertaining

[Mike Burrell · Rating 5 out of 5]

That was a fantastic book. Loved it!

[Tom · Rating 2 out of 5]

Interesting enough read. Some interesting information and it might have been more entertaining if I had a better context/understanding of the world(s) it took place in.

[Coepi · Rating 5 out of 5]

review tbd