Top Firm Facing Another Major PR Problem

Oliver Twist

A case of bad timing.

The Independent reports that Barclays has made as much as £500m in two years from speculating on food staples such as wheat and soya, prompting allegations that banks are profiting handsomely from the global food crisis.

The newspaper reports that a World Development Movement (WDM) report estimates that Barclays made as much as £529m from its 'food speculative activities' in 2010 and 2011.

The Daily Mail quotes Amy Horton, campaigner at the WDM, who has said: 'Barclays is gambling with the price of food, and therefore with people’s lives.

'Speculation benefits a tiny minority in the financial sector, and at the same time fuels food price spikes which force millions of people to go hungry. Governments must take urgent action to curb this reckless practice'.

A Barclays spokesperson said: 'We recognise there is a perception held by some stakeholders that participation in agricultural futures markets by some participants can unduly influence the prices of commodities. As a result, we continue to carefully monitor market trends and any research produced on this subject'.

Barclays was awarded a Public Eye ‘shame award’ for speculating on food prices in January.

The World Development Movement says that 6 European banks, including Deutche Bank and Commerzbank, have all either withdrawn food-based funds or stopped issuing new ones.

Our Highly Placed Professional says: 'I sense a cynical attempt a profit in all this (at a time when more traditional revenue streams have dried up).

'Unfortunately we live in a very unfair world, where firms can make money speculating on food prices at a time when large numbers of the world population live in poverty'.

Finally, The Sunday Telegraph reports that John Varley, Barclays' former CEO, is at the centre of a regulatory inquiry into unorthodox payments to Qatar's sovereign wealth fund.

The newspaper has learnt that Varley is one of the four current or former executives of Barclays whom the Financial Services Authority is investigating over 'advisory fees paid by the bank over the sovereign wealth fund's participation in an £11bn bail-out that saved Barclays from collapse at the height of the financial crisis in 2008.

Barclays makes £500m betting on food crisis

Barclays accused of making £500m out of hunger after speculating on global food prices

FSA turns attention to former Barclays chief John Varley

 

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