Barclays Bank has hinted it is considering pulling out of food speculation due to ‘reputational risk’. The World Development Movement is calling on the bank to commit to ending its involvement in commodity markets, and is urging George Osborne to back tough rules to curb speculation at a European level.
Rich Ricci, chief executive of Barclays’ corporate and investment arm, told the UK's Parliamentary Commission on Banking Standards yesterday, “If I decided to stop trading soft agricultural products it is not driven by regulation. It is because it doesn’t sit socially well with the large constituent of our customers”, according to the FT newspaper.
Barclays is the biggest UK player in food commodity markets, making up to an estimated £500 million from speculating on food prices in 2010 and 2011.
The World Development Movement’s director Deborah Doane said today:
Barclays appears to be relying on the police force of public opinion to tell it that speculating on food prices is wrong, rather than acknowledging its own moral responsibility. This is precisely why it is essential that strong regulation is introduced. Food speculation has devastating consequences, and George Osborne and fellow European finance ministers must take the lead in curbing it. Otherwise, as soon as the media spotlight shifts, Barclays will be able to quietly forget its fine words and resume business as usual.”
Financial speculation in commodity markets fuels dramatic spikes in food prices, pushing food beyond the reach of the world’s poorest people. Legislation to limit speculation is on the table at the EU, and finance ministers including George Osborne are due to vote on the proposals early in 2013.
The World Development Movement is calling for strict rules to prevent speculation driving up food and other commodity prices. This month the anti-poverty group released a spoof film on Barclays’ involvement in food speculation.