The Brits might be grousing about the rise of an American i-banker, but who else was Barclays going to pick? Jamie Dimon?
The way the local press responded to the news, you’d think there was an American werewolf loose in London.
And if you think about it, the promotion of an aggressive Yankee dealmaker, Bob Diamond, to run one of Europe’s largest banks — Barclays (BCS) — does seem a little, well, 1980s. In any case, the long-awaited succession at the top of one of England’s most treasured brands — John Varley has agreed to relinquish the CEO post of Barclays to his hard-charging subordinate — has finally happened. And it’s pretty much all playing out according to script.
The talking heads have already deemed Diamond’s elevation to the role a victory for the “casino” bankers (i.e., investment bankers) over their more staid “retail” cousins. The Financial Times’ John Gapper uses typical British restraint in describing Diamond’s promotion as “odd” while wondering why a less blameworthy retail banker wasn’t rewarded with the top slot. Gapper is one of the most insightful financial writers out there, but this one seems a little naive — this is bloodsport, John, and when was the last time you saw a retail banker with the lethal moves of a Wall Street guy?
Of course, they might have picked someone with experience in both. Or not. That would be because with the exception of Diamond’s near namesake — JPMorgan Chase’s (JPM) Jamie Dimon — there isn’t one. (Apologies to Mr. Diamond for the name drop that surely rankles, especially in a story about his own victory lap.)
But again, no one should be surprised by the news at all. Diamond’s steady hand at the helm of Barclays made it a fait accompli that he would one day succeed Varley in charge of the whole she-bang, the only issue was when. (He lost out to John Varley in 2004, and spent the last six years waiting his turn.) The Massachusetts native was instrumental in the purchase of the U.S. arm of then-bankrupt Lehman Brothers in 2008 — not soon enough to save Dick Fuld’s job, but with enough speed that it stanched the bleeding from the cratering investment bank and established Barclays Capital among the top tier of investment banks worldwide. [For more on Fuld today, see “Dick Fuld in Exile.”] What’s more, he helped engineer a capital raise from Middle Eastern investors in the thick of the crisis that meant the bank didn’t have to go to U.K. taxpayers hat-in-hand along with the rest of the industry.
What’s he going to do now that he calls all the shots? Probably business as usual, which means continuing to argue, a la Jamie Dimon, that the universal bank model does have its merits. (Including the ability to hold the government and taxpayers hostage due to being too big to fail.) He will also surely continue paying himself a king’s ransom. (Any story about a British bank needs a reference to monarchy.)
A more interesting question, says one insider, is just who gets to slide into the still-warm seat that Diamond has just vacated. Will it be Jerry del Missier, the Canadian president of Barclays Capital and co-chief of the firm’s corporate and investment banking efforts? Or will it be a Lehmanite like American Hugh “Skip” McGee, the head of the global investment banking division? In either case, it would be another non-Brit in the second slot, cementing the takeover of Barclays by aggressive North American dealmakers.
Diamond is said to be moving back to London from New York, where he has been living since 2008. And for good reason. He’s been making moves the likes of which a career investment banker normally only dreams about, and the best media coverage he has garnered in the U.S. before today’s news was an under-the-radar story in
Esquire
— in no small part because the spotlight seems fixed on Jamie Dimon. (Yours truly has played his own part in that.)
Well, it’s go time. The job is yours now, Mr. Diamond. Let’s see what you can do with it.
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