Controversy over Barclays new CEO

Stephen Beard Sep 7, 2010
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Controversy over Barclays new CEO

Stephen Beard Sep 7, 2010
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STEVE CHIOTAKIS: The British bank Barclays has announced its next CEO. But Bob Diamond already seemingly has two strikes against him going in. One thing, he’s an American. And number two, he’s head of the company’s investment banking arm. The job announcement could be controversial on both sides of the Atlantic, as Marketplace’s Stephen Beard tells us. He’s with us live from London to talk about the appointment. Good morning, Stephen.

STEPHEN BEARD: Hello Steve.

CHIOTAKIS: All right, so let’s handle the criticism one by one. If he’s an American, why is he getting flack from the U.S.?

BEARD: Well he’s controversial in some quarters of the U.S. for, as was said at the top, swooping like a vulture — picking up some of the remnants of Lehman Brothers after the crash for a song. And it was claimed he unfairly deprived Lehman shareholders of billions of dollars of assets.

CHIOTAKIS: And let’s go the other side of the Atlantic, Stephen. What’s his problem over in London?

BEARD: Well here, he’s widely seen as the epitome of what went wrong on Wall Street and in London during the boom years. He is an investment banker to his fingertips. He built up Barclay’s investment wing from scratch, made himself immensely wealthy in the process. And although Barclay survived the bust, Diamond is associated with that so-called casino capitalism — which has been portrayed as greedy, only concerned with a fast buck, not with providing finance for real businesses.

CHIOTAKIS: Yeah, “greed is good.” OK, but why’d he get the job then? I mean, he must be doing something right.

BEARD: Oh yeah. Barclays shareholders have every reason to be happy with Diamond. His division provided 90 percent of Barclay’s profits last year. And Michael Prest, an independent financial commentator here, says some of those other investment banking titans on Wall Street — Goldman Sachs, Morgan Stanley, who have been treated rather as pariahs as late — will also be happy about Diamond’s promotion.

MICHAEL PREST: They’ll see Bob Diamond’s appointment as a sign that business will be going back to usual. Or at least that many of the criticisms which have been leveled against them are exaggerated or even completely unjustified.

Diamond is scheduled to take over the top job at Barclay’s next March.

CHIOTAKIS: Marketplace’s Stephen Beard reporting this morning from London. Stephen, thanks.

BEARD: OK Steve.

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