Bank of England governor Andrew Bailey has been accused of being a court heard on Friday after the chairman of Barclays began an investigation into the banker's relationship with convicted sex offender Jeffrey Epstein, a city watchdog led by Bailey on Friday.
Nigel Higgins, who has filed accusations and still chaired Barclays, asked in 2019 if the Financial Conduct Authority (FCA) would be willing to stop the investigation if Staley resigned.
“We discussed whether there was a way for Staley to resign from his position to avoid any investigations that may have appealed to Barclays and Staley,” Bailey said in a witness's statement.
However, he told Higgins that it was “impossible” to ignore the cache of emails from JP Morgan.
“I explained to Staley that there's no way to avoid asking about “Snow White” emails,” Bailey said he ran the FCA. “It was impossible to ignore them given that this suggests a closer relationship.”
In these messages in 2010, Staley contacted Epstein and said, “Please say hello to Snow White.” Epstein replied, “What kind of character do you want next?”
The court was shown a note that Higgins had taken after a call with Bailey. The former is said to have declared, “You destroyed him.” “We find no evidence of a lack of integrity,” adds the memo.
“Yes, I remember the conversations that followed these lines,” Bailey told the court.
As Bailey rose to his feet in Upper Court, the conversation with Higgins was detailed in witness evidence.
Dressed in a dark suit and purple tie, Bailey sat from Staley as he was cross-examined by Robert Smith KC, who was trying to overturn the FCA decision in 2023 to ban senior roles in the UK's financial sector.
That decision, which cost £18 million in salary and bonuses at Barclays, occurred in an FCA investigation after a Barclays letter from October 2019 said it had “not had any close ties,” and then found it misinterpreted the regulator.
Staley resigned in 2021 over the preliminary findings of the investigation, officially released in 2023.
Staley's lawyers allege that members of the bank's board were explained to the extent of their relationship with deceased investors.
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Epstein died in prison in August 2019 and went to trial on charges of trafficking a minor girl for sex.
Bailey's cross-examination included forgetting the notes from calls and meetings held with Higgins in December 2019 after the FCA began its investigation.
The FCA says that JP Morgan, former employer of Staley, shared more than 1,200 email caches between Epstein and Staley, sparked an investigation after being said to be “really close,” and then had a relationship “beyond professional things in nature.”
Regulators say this is explained by the fact that Epstein sent Staley messages about sex, women, foreign holidays and worked behind the scenes to strengthen Staley's career by communicating with government officials, business leaders and royals.
The hearing, which began Monday, is expected to continue until at least March 14th, with Higgins and Staley set to stand up next week.
