Bank of England head had ‘clear impression’ that Staley was ‘close’ to Epstein

The Governor of the Bank of England has told a tribunal that he had a “clear impression” that the former head of Barclays, Jes Staley, “did appear to have a close relationship” with paedophile financier Jeffrey Epstein.

Andrew Bailey, who was chief executive of the Financial Conduct Authority (FCA) from 2016 to 2020, appeared at the Upper Tribunal in London to give evidence in Mr Staley’s legal challenge against the watchdog over his links to Epstein.

Mr Staley, who ran Barclays from 2015 to 2021, was fined more than £1.8 million and banned from holding senior roles in the financial sector by the FCA in 2023, after it found he misled the regulator over the nature of his and Epstein’s relationship.

Epstein was jailed for child sex offences in 2008 and was arrested again in 2019. He died in prison that year while awaiting trial for sex trafficking offences.

Mr Staley acted as a private banker to the financier during his time at JP Morgan, where he worked for more than 30 years.

But in a letter to the FCA in 2019, reviewed by Mr Staley, Barclays claimed that he did not have a “close relationship” with Epstein and their last contact was “well before” he joined the bank.

The watchdog later found that the statements were misleading and that Mr Staley acted “recklessly” by allowing the letter to be sent. The banker is now challenging the FCA’s findings and the ban.

In a witness statement for the hearing on Friday, Mr Bailey told the court that in August 2019, after press speculation about the relationship between Mr Staley and Epstein, he wanted Barclays to provide an “assurance” about “the steps it had taken to satisfy itself as to Mr Staley’s fitness and propriety for his role”.

The tribunal heard that in October 2019, Barclays’ chairman Nigel Higgins said in a letter, approved by Mr Staley, that “Jes has confirmed to us that he did not have a close relationship with Mr Epstein” and that “Jes’ last contact with Mr Epstein was well before he joined Barclays in 2015”.

Mr Bailey said that “it did not appear that there was any need for the authority to take further action itself” after the letter, but in November 2019, JP Morgan contacted the FCA saying “they had found documents suggesting some potential impropriety in the relationship”.

Mr Bailey said that he was provided with a “daily summary” of what was found, as more than 1,200 documents were reviewed, and that he was “interested in whether the evidence showed that there was in fact a close relationship”.

He said: “My clear impression from reading the summary of the documents was that Mr Staley did appear to have a close relationship with Mr Epstein. Barclays’ letter had said that he did not.

“This was concerning, as it suggested that Mr Staley may have misled Barclays and thereby misled the authority.”

He continued: “Until we received the emails from JP Morgan, we had presumed that the whole matter was closed.

“We had seen no evidence that caused us to question the statement in the letter.

“When we received the emails from JP Morgan, it became difficult to reconcile the language in the letter with the contents of the emails.”

He also said that it was “not my role” to decide whether an investigation should be launched over the letter, but said he was “kept informed of the decision”.

Barristers for the FCA previously told the tribunal that Mr Staley acted “recklessly and without integrity” by allowing the letter to be sent, and that he and Epstein had a “friendship” and maintained contact through Mr Staley’s daughter up to at least February 2017.

Leigh-Ann Mulcahy KC, for the authority, said that Mr Staley described Epstein in emails as like “family” and one of his “deepest” and “most cherished” friends, and that between March 2016 and February 2017, Mr Staley’s daughter, Alexa Staley, was used as an intermediary.

But Robert Smith KC, for Mr Staley, said in written submissions that his client “has never attempted to conceal his relationship with Mr Epstein” and that letter aimed to “assure the authority that neither Barclays nor Mr Staley had had any knowledge of or involvement in” Epstein’s criminal activities.

The barrister also said that Mr Staley “does not accept that the email correspondence passing between Mr Epstein and his daughter constituted contact between himself and Mr Epstein”, and that their relationship was “firmly grounded in business”.

Mr Staley, who previously said he “deeply regrets” his relationship with the disgraced financier, is to give evidence later this month.

The hearing before Upper Tribunal Judge Tim Herrington and UT Members Martin Fraenkel and Cathy Farquharson is due to conclude in April.