Business as usual for Bob Diamond and for the banks

Sean O'Grady

RTR2I08B 300x225 Business as usual for Bob Diamond and for the banksIf the banking world wanted to show the rest of us that things are back to “business as usual” they could not have found a more potent symbol than to have promoted the head of Barclays Capital, the so-called “casino” end of Barclays, to run the group as a whole.

Mr Diamond’s (right) operation was lucky, during the financial crisis, not to go the way of Lehmans, and even now Barclays Group is dependent on state support through soft loans and general support to the economy, although of course it escaped being nationalised.

Mr Diamond’s other claim to fame is that he has been paid handsomely for his work, obscenely so by most standards. So what?

The point here is that, like drunk drivers or the folk who take dangerous mutts out in the park, banks and bankers do what comes naturally, and it is up to the rest of us to stop them through laws, regulation and enforcement. If the rest of us believe that what Barclays is doing represents a threat to the wider economy or is just offensive, then we have simply to regulate them, either unilaterally or internationally. We cannot, and ought not, rely on bankers’ sense of shame to restrain them, no more than we should for MPs or, ahem, journalists. In our own ways we are all a bit greedy, and we need restraint.

What is plain is that the banks remain unbound by the state. That is our fault, not theirs.

Meanwhile the banking world has offered us the ex boss of HSBC as a trade minister, serving without a salary. Nice of them. Stephen Green is as well qualified as anyone, though it seems odd that we can’t recruit a minister from the “real economy”, as Lord Davies, his predecessor was also an ex banker.

The real question is what a trade minister can actually do to promote trade. The late Alan Clark’s Diaries were especially amusing on the frustrations of the job, and how all manner of extraneous stuff about human rights was getting in the way of selling weapons to South Americans in the 1980s.

Actually, there’s no necessity to have an ex business figure anyway in the department. Why not ask an ex head to be minister for schools or a brilliant surgeon to be NHS minister? In any case I suspect the exchange rate is a bit more e important than whatever “star” is brought into government to do the trade job.

(Photo: Reuters)

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  • pilsden

    Didn’t escape nationalisation chose not to be part of govt scheme and raised capital elsewhere or would you have preferred we owned another bank we couldn’t influence.

  • tumper

    I expect there will be no reining in on the Financial Sector excesses by this Coalition.

    It’s all jobs (and gargantuan bonuses) for the boys innit?

  • Charles Barry

    “Mr Diamond’s (right) operation was lucky, during the financial crisis, not to go the way of Lehmans”.

    Actually the demise of Lehman’s was caused by spectacularly poor managerial decisions by its CEO and COO during the period 2006-2008. Luck had little if anything to do with it.

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