Saturday, July 24, 2010

No bank should be a weight to the taxpayer, says Bob Diamond Business The Observer

Barclays boss Bob Diamond

Barclays boss Bob Diamond Photograph: CARL DE SOUZA/AFP/Getty Images

Bob Diamond, the high-profile landowner at the eye of the charge over City bonuses, is championing the origination of a bailout account for banks to safeguard that the industry never again needs multibillion-pound taxpayer handouts.

The 58-year-old boss of Barclays, who has privately banked some-more than £50m in the past 4 years, believes a bank-funded bailout word intrigue would head off calls to mangle up big names such as Barclays or shorten their trade activities, as due by US boss Barack Obama.

In a wide-ranging talk with the Observer following announcement of Barclays"s jot down £11.6bn profits, Diamond insisted he had no aspiration to turn a arch senior manager and that he continually deserted the approaches he continually receives from rivals charity the tip seat.

The former teacher, innate in Massachusetts but until last year a 20-year proprietor of London, conceded that bankers" bonuses "look big" and that inspection of his own compensate deals was an irritant.

Taut, gaunt and sharp-suited, Diamond has run the Barclays Capital investment promissory note arm for the last fourteen years, moving the operation on to the universe theatre though the takeover of the Wall Street operations of Lehman Brothers in Sep 2008. The commercial operation right away generates half of the group"s underlying profits, overshadowing the high travel promissory note commercial operation and ensuring the organisation is right away compared with big pay. The normal BarCap landowner perceived £191,000 last year.

It was the unusual marketplace meltdown caused by the Lehman fall that sparked the mad discuss about big banks, after taxpayers were forced to bail out Royal Bank of Scotland, Lloyds and HBOS .

While Barclays did not take taxpayer income directly, it has benefited from the ubiquitous await for the monetary complement – an additional reason for the debate over pay. The bank argues that contributions to a bailout account would be formed on the scale of the risks taken rather than on transactions, as due by supporters of a Robin Hood tax. "We don"t think for a second that any bank should be a weight on the taxpayer," pronounced Diamond. "The banks that succeeded during this duration are usually as indignant as the open is. The feeling that banks don"t wish law is positively wrong," he said.

Barclays lifted the income indispensable to accelerate the collateral in the weeks after the Lehman fall from Middle Eastern investors in a understanding so argumentative the shareholders roughly voted it down. The bank has right away turn the print kid for those who reckon banks that run high-street operations to one side vital investment operations, mostly dubbed "casinos" by critics such as Liberal Democrat Treasury orator Vince Cable, should be damaged up.

"It"s really easy for him to have use of difference similar to casino promissory note but there"s no piece to it," Diamond said. But his aspiration to have BarCap a "tier one" player to contest head on in Wall Street causes stress in a small quarters.

"It"s usually as well easy to contend big is bad. There is no justification that"s true. And in actuality what is transparent if we usually go to not as big banks and cringe the banks, there will be a disastrous stroke on businesses to cringe themselves; there will be a disastrous stroke on trade, and thus there"ll be a disastrous stroke on the tellurian economy," he added.

A immoderate Chelsea believer who pipes midweek games to his laptop in New York around Slingbox from London, Diamond cannot censor his disappointment with detractors who disagree Barclays usually avoided the same predestine as the damaged RBS by being knocked about by it to the takeover of Dutch bank ABN Amro, and afterwards benefiting from a duration of high marketplace conditions as governments flooded income markets with billions of holds to account the promissory note zone bailout.

"Well, I"m sorry," he said, sounding angry. "It was a lot of difficult work, before formulation and about superb execution."

2009 was a violent year for Barclays. In Jan the shares crashed to 47p among fears it was on the margin of collapse. Barclays had to remonstrate the Treasury it could tarry but chance to the item insurance intrigue and win over sceptics who feared the bank was stealing the border of the waste on loans. The shares are right away value some-more than 300p. Diamond is additionally undone with Hank Paulson, the US book cabinet member in the failing days of the Bush administration, who famously unsuccessful to find a saviour for Lehman Brothers.

In his new book, Paulson puts the censure for Lehman"s fall on the UK authorities, together with the Financial Services Authority, for refusing to concede Barclays to mountain a rescue bid since of the problems with guaranteeing Lehman"s trade positions. This is not how Diamond remembers it.

"We had done transparent to cabinet member Paulson that we would usually suggest a last understanding to the FSA if we could find a resolution for clearing and appropriation when the markets non-stop on Monday. We were additionally transparent that it was not a make a difference for the UK authorities to yield the guarantee, but for the US supervision or a in isolation solution. Our disappointment was that we were not wakeful that a apart review with the FSA [about guaranteeing trading] was receiving place."

Even so, Paulson"s remarks have combined fuel to the story that Barclays was prevented from shopping Lehman. During that unusual week end in Sep 2008 Diamond"s repute was battered, and afterwards bolstered usually twenty-four hours after when Barclays took over the Wall Street operations of the collapsed bank.

So, he and Barclays were lucky? Diamond can hardly answer. "To think of us as propitious since we were rebuilt to govern on Lehman Brothers … " He tailed off. "I do think it was about being rebuilt as most as it has to do with the confidant bravery of the board."

The boardroom dynamics of Barclays have supposing gossips with years of conjecture about the attribute in between Diamond and John Varley, a indifferent English gent allocated arch senior manager after an inner competition for the top.

Diamond certified he did not primarily see eye to eye with Varley and the span had to outlay a integrate of hours holed up together in the early 2000s to produce out their differences. "Both of us are peaceful to compromise," Diamond said.

Some cheering has been compulsory in the routine perhaps? "I don"t think it ever has. I give John credit for that some-more than me. I can be well known to get a bit red in the face and a small hot."

A glance of an unimpressed Diamond was seen last Tuesday when he berated a room full of reporters for their one after another questions about reward process instead of focusing on "tremendous" figures.

"Sometimes I think there"s some-more compensation around the unsuccessful institutions than the successful ones. We"re not profitable bonuses for failure," he said.

It is a difficult evidence to have in the surrounded by of a monetary predicament that has led to compensate freezes and pursuit waste and Diamond acknowledges that bankers" compensate could see big to the public. "We have an requisite to all stakeholders to handle responsibly, whilst additionally creation certain we are competitive, putting the most appropriate group on the margin for the clients and shareholders."

In an try to defuse the row, he has affianced not to take a reward for 2009, nonetheless longer-term deals might still compensate out millions on tip of his £250,000 income and the £27m of shares he has cashed in during the year.

The takeover of Lehman gave Diamond, one of 9 children, an forgive to move behind to the US last year after a prolonged widen in London, during that time all 3 of his young kids graduated from the American propagandize in St John"s Wood, north London. All 3 are right away in the States, that additionally suits Diamond, who spelt out that this was one of his motivations for the relocation.

His really American pretension of "president" equates to he gets unchanging approaches about jobs. "I get called on each singular event out there. People pretence that I"m sitting here chomping at the bit ready to be CEO and that"s not the case," he said.

Health-conscious, and a penetrating sportsman, Diamond added: "I have no seductiveness in unresolved up my spikes."

Neither does he have most seductiveness in attempts to revisit the Guardian"s review in to taxation deterrence schemes drawn up by the bank"s opaquely structured collateral markets division, that stirred Barclays to issue an claim opposite the paper last year. "Our attribute with HM Revenue Customs is really strong. It"s all open books and compliant, and in actuality we have a clever attribute with the authorities," he said.

He is not that penetrating on articulate about his pay, either, but knows that inspection of it goes with the domain of being on the bank"s house – a chair he resisted until 2005, notwithstanding fasten Barclays in 1996. "I don"t wish to bemoan as well much. I"m a big boy."


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