Bob Diamond, one of the world’s highest paid bankers, is named as chief executive of Barclays in a move Economics Editor Faisal Islam says challenges the government’s position on banking reform.
Mr Diamond, who is estimated to be worth £95m, is expected to take over from John Varley who will end a seven-year stint as chief executive on 31 March next year.
The 59-year-old American’s appointment was made today as part of a shake up at the top of Barclays. Mr Diamond said he was “honoured” to take on the role in “the critical period ahead”.
Mr Diamond joined the group in 1996 and currently serves as Barclays’ president and chief executive of the firm’s investment arm, Barclays Capital.
HSBC chairman Stephen Green has also moved from his current position to become Minister of State for Trade and Investment. He is expected to start next January.
Married with three children, the businessman is a keen sports fan and Chelsea supporter, who handed over the Barclays Premiere League trophy to the club’s captain John Terry in May. The banker is also an advisor to Boris Johnson and currently sits as a trustee to the Mayor’s Fund for London.
'Bob Diamond would appear to be the foremost force of banker resistance'
Bob Diamond was specifically mentioned by George Osborne in the Channel 4 News debate, who said his pay package "beggars belief". Peter Mandelson said he was the unacceptable face of capitalism, writes Economics Editor Faisal Islam.
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.
His appointment may be seen controversial among members of the coalition such as Business Secretary Vince Cable, who has made critical comments about investment banking in the past. It has been suggested that Mr Diamond’s lack of experience in traditional high street banking will be at odds with the government’s aims.
It comes at a time when ministers are urging Britain’s banking sector to open up lending to small businesses in a bid to aid the economic recovery.
Although Mr Diamond did not receive a bonus this year amid the fallout of the financial crisis, his wealth may also prove controversial.
The Times Rich list estimates that he sits on a personal fortune worth around £95m. He is thought to have made £11.6bn last year despite waiving a pay rise.
In 2007 Mr Diamond received a £21m payment at the height of the boom in financial services. He also earned more than £20m on the sale of his stake in the group’s fund management arm last year.
Earlier this year, Mr Diamond was criticised by Labour’s Lord Mandelson as “the unacceptable face of banking”, who earned tens of millions of pounds by “deal-making and shuffling paper around”.