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The row between Barclays and its shareholders over the bank's plan to raise new capital from sovereign wealth funds in the Middle East is a wonderful mix of posturing and principle, pique and pay, set against the background of the biggest poker game the business world has seen.
The posturing comes from the investing institutions in London, which are demanding the right to subscribe the new capital themselves rather than see their holdings massively diluted by the new investors. But we all know none of them want to put up the money - even if they have it given the uncertainties afflicting the global economy and the continuing lack of clarity around what banks own and what they owe.
That said, the institutions are defending a principle well worth fighting for - that of pre-emption, under which existing shareholders have first refusal when new equity funding is sought. For Barclays to ride roughshod over this principle is nothing less than shameful. As a pillar of the City and owner of Barclays Global Investors, one of the world's biggest equity-fund managers, it should be upholding the rules, not cynically ignoring them.
But in the end this will turn out to be a storm in a teacup. There will be a meeting between Barclays chairman Marcus Agius and the investing institutions before the end of the week. Strong cups of tea will be exchanged. Barclays, under duress, will make a token concession to allow existing shareholders some access to the deal.
The institutions will accept, grateful because they can claim they have saved the pre-emption principle without having to stump up the cash. Both sides will emerge satisfied. Life will go on as before.
That said, the pique will remain. What has really outraged the City is the belief that Barclays has gone for Middle East funding rather than the Government bailout only because of pay. It wants to continue forking out massive bonuses to Bob Diamond, the head of Barclays Capital, and his team. They, chief executive John Varley and indeed Agius would be astonished at the venom with which this is being discussed down on the City floor.
And this brings us to poker. The real Barclays story is not this row, it is the gigantic mix of bluff and bet on which the bank is currently embarked - the world's biggest poker game. The bluff is that it has somehow avoided the toxic horror show that has brought all its big rivals to their knees - despite it being one of the stars when the show was still playing to packed houses.
The bet is that investment banking will recover before the bluff is called, so it will be able successfully to trade its way through the current hard times. We obviously hope it works. But if the bet fails, then today's grumpy institutions will have the opportunity to pump in all the capital they can muster at some not-too- distant date.
Sharing out the risk on pensions
It has been an article of faith in the pensions industry that there will soon be no private-sector defined benefit pension schemes left open if the Government does not act to ease the burden of cost and compliance on employers.
Organisations such as the Association of Consulting Actuaries have called time and again for changes in the law to make the rules more flexible, and to allow for risk-sharing whereby the future and as-yet unforeseen costs from longevity and similar factors are divided up more evenly between the company and the members as a way of mitigating the open-ended commitment companies now face. But until yesterday morning there had been no positive response.
From having one of the best levels of private-pension provision in Europe when Labour came to power in 1997, we will shortly - most pension professionals believe - have one of the worst. Unfortunately, perhaps until now, the Government has seemed to be in denial about this.
What is new is a hint dropped by pensions minister Rosie Winterton, talking to the CBI yesterday, that the Government is prepared to consult on changes to what is known as the Section 75 rule.This is the rule requiring any business that is in the course of winding up or restructuring fully to cover any deficit in its pension scheme as part of that process. As Clifford Chance's Mark Hyde points out, this in effect gives the pensions regulator a seat at the table with other creditors - and adds a further layer of complication to what is already a difficult negotiation.
But while this shift by Government will be welcomed by employers, it is not enough. Indeed, it is perhaps no more than a pragmatic recognition, as the economy deteriorates and companies get into difficulties, that it will become unenforceable.
What would be much more useful and realistic, therefore, would be for Government to give a positive verdict on an already-completed consultation it carried out over the summer. This looked at the possibility of modifying sponsoring company obligations to allow risk-sharing.
It might mean, other things being equal, that members' pensions would be lower than under the current system. But that surely is better than no worthwhile pension at all - which is the more likely option for future generations if all the schemes linked to salary are forced to close.
