PESTEL ANALYSIS OF BARCLAYS PLC

PESTLE analysis is very useful for studying the environment in which a company operates and accessing external factors influencing the company in the markets it operates. PESTLE is the acronym for the following categories of investigation: political, economic, sociological, technological, legal and environmental (Cheverton, 2004; Partridge and Sinclair-Hunt, 2006).
Discussing the political factors influencing operation of the banks in the national, local and regional levels and legislation, it should be mentioned that banks have always been to a certain degree regulated by the government (Benston, 2000). For example, government determines the fraction of reserves that a commercial bank should keep with the Central Bank. Taking into consideration the fact that Barclays Plc operates in more than 50 countries it will not be possible to study all the possible regulative frameworks within the current research. Various regulative bodies carry out controlling functions under various conditions such as Controller of the Currency (OCC) in the United States (Benston, 2000).
Tax regulation the company submits to is one more important political aspect. Barclays obeys regional tax framework in all the countries of its operation. Besides, the company has to submit to double taxation in the cases where there are appropriate agreements between countries. It may be stated that tax risk is observed because regular changes in tax legislation and interpretation of taxation framework (Barclays 2008 Annual Report).
The most important economic change in banks’ operation is the current unavailability of loans given by the banks. Today, banks cannot provide the volume of loans that was possible before the financial crisis. Global economic recession has followed the US sub-prime mortgage crisis that broke out in summer 2007. Bank of England reduced the