Diamond: the foremost force of banker resistance?

The ructions at the top of Barclays have been somewhat Shakespearean in character over the past few years.

It was said that US-born investment banker Bob Diamond was the foil for the calmer, older school John Varley.

Diamond, currently the president of Barclays, was the architect of the wildly successful purchase of the bankrupt core of Lehman Brothers’ US business at the height of the financial crisis in 2008. He has basically been New York based.

This move is a sign that Barclays sees its US investment banking expansion as core to its future. It may suggest a shift in Barclays’ attentions away from the UK.

This is an intriguing move, given the backdrop of an epic backroom battle within Britain about the future relationship between the state and its banking system.

Bob Diamond was specifically mentioned by George Osborne in the Channel 4 debate, who said his pay package “beggars belief”. Peter Mandelson said he was the unacceptable face of capitalism.

He was undoubtedly one of the ‘pinstriped Scargills’ referred to by Vince Cable, given his uncompromising defence of the right to pay barclays top bankers large amounts of money.

He speaks his mind, criticising some of President Obama’s reforms to banker pay at this year’s Davos. I remember cornering him in early 2008, at a time when the balance sheets of all banks were under question, and, frankly suspicion. He saw the fragility as a huge once-in-a-lifetime opportunity to propel Barclays into the big time, as a genuine competitor to Goldman Sachs and the like.

Critics will point to the fact that Barclays nearly bought both ABN Amro (a purchase which bankrupted RBS) and Lehman Brothers before its bankruptcy.

One thing that is absolutely clear given Diamond Bob’s elevation to the Barclays top job, is that the bank fully intends to remain an investment bank.

Against the backdrop of the UK banking commission studying moves to separate high street banks from their so-called ‘casino’ arms, Bob Diamond would appear to be the foremost force of banker resistance.

And lastly, there are forces within the coalition who have considered finding a home for John Varley as a replacement for Mervyn King at the new all powerful Bank of England.