Jes Staley, the CEO of Barclays Plc, has announced his resignation following a U.K. regulatory investigation into how he described his relationship with financier and convicted sex offender Jeffrey Epstein. The surprise departure marks the end of Staley’s tumultuous six-year tenure at the helm of the British bank, which has been clouded by various controversies, including his ties to Epstein.
Staley, 64, will step down on Monday, with C.S. Venkatakrishnan—Barclays’ markets division head and former chief risk officer—taking over as CEO. Venkatakrishnan had been widely expected to succeed Staley after his promotion last year, and the transition is part of Barclays’ long-term succession planning.
In a statement, Barclays confirmed that the U.K. regulators had presented preliminary conclusions regarding Staley’s relationship with Epstein, prompting his decision to step down. The investigation, which has been ongoing since 2019, focuses on how Staley characterized his ties to Epstein during his time at JPMorgan and subsequently when he joined Barclays. Staley plans to contest the findings, but the bank and its board have agreed on his departure.
The Epstein Fallout
Staley’s exit is the latest chapter in the shadow cast by Jeffrey Epstein, who was found dead in his U.S. prison cell in 2019 after facing charges of sex trafficking. Epstein’s ties to some of the world’s most powerful figures, including Prince Andrew and Staley, have brought unwanted attention to those involved. While Staley has denied any wrongdoing, the investigation into his ties to Epstein has continued to haunt him, even as Barclays posted record financial results in recent quarters.
The U.K. regulators have been probing how Staley characterized his relationship with Epstein, who had been a client of JPMorgan when Staley ran the bank’s private wealth division. Staley has stated that their professional relationship tapered off after he left JPMorgan in 2013, with contact dwindling in 2015 before he joined Barclays. Despite this, he volunteered to provide Barclays’ board with his account of the relationship in 2019.
“I have been very transparent with the bank about my relationship with Epstein,” Staley said in an interview with Bloomberg Television in 2020. However, the ongoing regulatory probe has persisted, with the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) refusing to comment on the investigation’s progress.
Controversies and Challenges at Barclays
Staley’s tenure at Barclays wasn’t without its challenges. Aside from the Epstein saga, he faced regulatory scrutiny in 2018 for attempting to unmask a whistleblower who had raised concerns about the bank’s operations. Although he kept his job, the FCA and PRA fined him £642,000 ($877,000) and slashed his 2016 bonus by £500,000 for failing to act with due skill and care.
Despite these controversies, Staley’s strategic decisions at Barclays largely paid off. His leadership helped revitalize the bank’s investment banking division, enhancing its competitive edge against Wall Street’s giants. His focus on expanding Barclays’ presence in the securities business and hiring top talent from JPMorgan contributed to the bank’s success, especially during the heightened capital markets activity spurred by the pandemic.
Venkatakrishnan’s Leadership Transition
Venkatakrishnan’s promotion to CEO comes as no surprise, as he had been viewed as Staley’s preferred successor for over a year. Venkatakrishnan, who had previously served as chief risk officer, was one of Staley’s earliest hires from JPMorgan. His ascent to the top spot ensures continuity in leadership during a period of transition for Barclays.
Analysts have expressed concern over Staley’s sudden departure, with Edward Firth of Keefe, Bruyette & Woods describing it as a “negative” development. However, Firth also noted that Barclays’ clear succession plan and Venkatakrishnan’s proven experience should allow the bank to weather the change successfully.
As Staley exits, Barclays faces a critical juncture. While the CEO transition is expected to bring stability, the lingering investigation into Staley’s ties to Epstein will continue to cast a shadow over the bank’s leadership. Nevertheless, with Venkatakrishnan taking the reins, Barclays is poised for a new chapter under the direction of a leader familiar with the bank’s inner workings and strategic goals.
