"Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations".
So say the FSA. But excuse me, what exactly is wrong. Only a few months ago the City was lauded for its ingenuity and creativity. Now I would be the first to criticise Barclays for its aggressive tax planning for itself and its clients, and I have mentioned some of its inconsistent accounting practices.
These things can be taken too far - witness Enron and a whole host of other examples - but there is good and bad complexity. Some "good examples" are the many flavours of leveraged financing and leveraged leasing, and another is project finance, both of which lead to enormous volumes of paperwork, but seem to work and have worked for years. But they have their own bastard children the collateralised asset pool and PFI/PPP. The difference is that it takes a good banker or a good regulator to understand the difference, and the FSA clearly does not.
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