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* Ex-JPMorgan banker Staley becomes Barclays CEO on Dec. 1
* Bank of England releases "stress test" results samemorning
* Staley's tasks: cut costs, fix investment bank, ring-fenceplan
* Latest fine shows Barclays still clearing up from pastmisdeeds
By Steve Slater and Simon Jessop
LONDON, Nov 27 (Reuters) - Welcome to Barclays: At roughly 6a.m. on Jes Staley's first day as its new chief executive nextweek the Bank of England will tell him whether the British bankhas enough money to survive a deep recession.
Barclays is expected to 'pass' the regulator'sfinancial healthcheck on Tuesday, but already analysts andinvestors say a tougher test in 2016 could cause Staley toconsider cutting the dividend. At least the timing of the'stress test' demonstrates that the job of managing Britain'sthird biggest bank is never dull.
That was made even clearer this week when Barclays was hitwith its seventh fine in the past six years by Britain'sregulator for past wrongdoing, this time for cutting cornerswhen vetting rich customers in a case where executives went sofar as to buy a special safe to keep the identity of the clientssecret.
Boston-born Staley, a former head of investment banking atU.S. bank JP Morgan who fixed a stutter at high schoolby joining the debating team, faces a raft of challenges.
Taking a similarly brave approach to these problems couldresult in radical action being taken to revive the 325-year-oldbank's fortunes, analysts and investors say, such as spinningoff its investment bank and relocating it to New York.
"Clarity on strategy is needed, with perhaps only a break-upable to crystallise value," said James Chappell, an analyst atBerenberg. "Our preference remains for a full separation of theinvestment bank with a listing in the U.S."
But Staley first needs to define the investment bank'sstrategy, after multiple shifts in recent years.
The bank's latest fine also shows there's still work to doto put past problems behind it and improve culture andstandards, and Staley said when he was appointed a month ago thebank must avoid "adversarial" relationships with regulators.
Other major issues he needs to quickly address is howBarclays plans to separate its domestic retail bank from therest of the business to meet new UK rules and the need to cutout more costs.
"His urgent jobs are continuing to reduce the capital tiedup in the business, how to push up the RoE (return on equity)and push down costs, and what to be thinking about in terms ofthe mix of the business," said Chris Wheeler, analyst atAtlantic Securities.
SECOND TIME AROUND
Staley, 58, will not come to Barclays cold. He has alreadybeen visiting offices and trading floors in London and New York,industry sources said.
He knows Barclays well after nearly becoming CEO three yearsago, when he was the top external candidate to replace Americaninvestment banker Bob Diamond, who was criticised by regulatorsfor an "aggressive" culture that encouraged too much risk-takingin pursuit of profits.
But Staley was passed over amid worries there might be apolitical and media outcry over the cost of buying him out ofhis JPMorgan contract and the fact that he was yet another U.S.investment banker, people familiar with the matter said.
Three years on and the political climate had now changed,making Staley the obvious candidate once again, if he was stillinterested, the sources said. He was.
Staley will be paid up to 8.2 million pounds a year, makinghim one of the highest paid bankers in Europe. Yet he has lost220,000 pounds ($332,000) even before starting, due to a dip inthe value of 6.5 million pounds of Barclays shares he boughtthree weeks ago.
Staley spent 34 years at JPMorgan, which he joined in 1979but left after falling out with CEO Jamie Dimon.
The keen yachtsman, the son of a U.S. corporate executive,grew up in Pennsylvania, where he played the trumpet to avoidspeaking and then joined the school's debate team to overcome astutter, he recalled last year.
"I remember when the letter B scared me," Staley said in aspeech after accepting an award at the American Institute forStuttering. "And I remember when I would do anything to try toavoid the letter W. A simple question - 'Why?' - would terrifyme."
The stutter disappeared and after graduating from BowdoinCollege in Maine, Staley moved up the JPMorgan ranks, spendingeight years in Brazil and then, back in New York, running itsasset management business, and from 2009 its investment bank.But he was demoted in a 2012 reshuffle and left in early 2013 tojoin U.S. hedge fund firm BlueMountain Capital.
Barclays is just over halfway through a three-year plan tocut 19,000 jobs in an attempt to improve returns and ChairmanJohn McFarlane, who arrived in April, wants to accelerate theturnaround.
"Jes Staley has clearly been hired as an ambidextrous CEO,"said Matthew Beesley, head of global equities at Henderson, oneof the bank's top 40 investors. He cited Staley's experience inwealth and asset management as areas he could look to expand atBarclays.
Its core UK retail banking and Barclaycard credit card armsare profitable and running well, leaving the investment bank, teleast profitable area, in need of the most attention.
Barclays is shrinking the investment bank to focus on U.S.and UK markets and limit it to using 30 percent of groupcapital, from about half previously.
"It seems clear that the strategy tweaks put in place byJohn McFarlane are there for Jes Staley to implement," said Guyde Blonay, manager of the Jupiter Financial Opportunities Fund,an investor in Barclays.
"His priorities will be on increasing returns, not scale."($1 = 0.6632 pounds)
(Additional reporting by Sinead Cruise; Editing by GregMahlich)
