Yesterday was the Barclays AGM in London. Together with two of my colleagues I went inside to ask the board of directors why they continue to help institutional investors to speculate on food, even though they are well aware that this pushes prices up and forces people into hunger.
The AGM is hosted at the grandiose Royal Festival Hall in central London. After passing the initial airport-like security checks and registering our questions we queue up in front of the big hall. The nearest security guard informs us that a protest is taking place outside the venue.
A group of World Development Movement campaigners are outside dressed up as blue Barclays eagles. Both shareholders and journalists will have to pass them to get in here.
We are some of the first people to get into the grand hall where the AGM will take place. We want to make sure that we get an opportunity to ask our questions. While we wait for the ‘show’ to start, I get a text informing us that since yesterday almost 1,500 people have emailed Antony Jenkins, Barclays’ CEO, in the last 24 hours asking him to withdraw completely from food speculation as well as support new regulations to curb it.
Jenkins: “Barclays will be a socially useful bank"
The AGM starts with a short film painting a glossy picture of Barclays as a driver of innovation and progress. Following this, speeches by chair of the board David Walker and chief executive Anthony Jenkins put emphasis on Barclays as a “socially useful bank” that is “helping people to achieve their ambitions in the right way”. Another focus is regulation. Walker says that regulation – in some cases “intrusive regulation” - is here to stay.
One of the first people to ask a question is a 75 year-old widow who is living “quite well” on just over £700 pounds a month and finds it hard to understand why Barclays are paying some “greedy b******s” millions. In response to Jenkins’ new slogan of Barclays becoming the ‘Go To’ bank, she says that Barclays should “Go to hell”. The shareholders respond with applause, but Walker simply responds to this and other similar questions that they have to pay a competitive salary to be able attract talent on the market.
About half way through the question session it is our turn. “How can Barclays be called a ‘socially useful bank’ while you continue to facilitate speculation on food by, for instance, pension funds?” At first Antony Jenkins says he thinks Barclays should only support legitimate hedging, e.g. producers or users of food who want to use futures contracts to protect them from losses if there is a dramatic increase (for buyers) or fall (for sellers) in food prices. However, when we question why the bank continues to facilitate speculation by institutional investors such as pension funds, Jenkins and Walker seem a little stuck.
They reply that they do not regard trading food contracts with pension funds as speculation. Despite our challenging the logic of this statement over three different questions, they remain adamant: Pension funds do not speculate on food. Therefore they do not see any problem.
Unfortunately it’s not just semantics. Pension funds buy food contracts, often via complex products such as index funds offered by banks like Barclays, in an attempt to profit from a change in prices (in this case, an increase, usually over an extended period of time) – the classic definition of speculation. They have no interest in the underlying food, but in recent years have come to account for a huge proportion of the money which is bet on food prices – index funds are said to make up 60 per cent of financial holdings in the agricultural futures markets. But not a single pound of this is going into improving food production – which is what might be counted as real investment.
Do Jenkins and Walker really not understand this? If so, they shouldn’t be running a major bank which has the potential to repeat the devastation caused by the current financial crisis.
Hopefully, more likely, they understand this quite well, and Barclays continues to bank on hunger simply because they only care about profits. That does not sound very socially useful to me. I hope Jenkins will return home to an inbox full of emails about food speculation. You can send one by clicking here.
Today has showed that there is need for continued pressure on the UK government for regulation to curb food speculation, and pressure on banks like Barclays if we want them to withdraw from speculation. But it has also showed that we are able to apply such pressure with simultaneous actions of creative protest, emails, and critical questions.