Bob Diamond is a brilliant banker, one of the most
successful of his generation. Diamond has also been a lucky
banker. Today, he exhausted his reserves of good fortune.
Tied to luck is judgment. For all his qualities,
Diamonds judgment has often been questionable. Hes
survived that failing on numerous previous occasions, but not
Over the past 48 hours, stories started to leak that
Barclays would try to pin some of the blame for its role in the
Libor scandal on the Bank of England that, in some
way, the Bank was complicit in allowing banks to report much
lower interbank funding costs at the height of the financial
crisis because of the fear that, if the real rates were
revealed, it would lead to a run on the banks.
Those leaks came as no surprise to Euromoney. It was a line
wed heard from various Barclays insiders as soon as the
fine against the bank was announced last week.
Yesterday, it was further speculated probably leaked
that Diamond planned to bring the Bank of Englands
involvement up during his appearance at the Commons Treasury
Select Committee on Wednesday.
For a board that had up to that point been supportive of
chairman Marcus Agius even threw himself under the proverbial
bus to try to protect his CEO this was probably the
Diamond should have taken a page from the
Jamie Dimon playbook. As soon as the JPMorgan CIO losses
were fully revealed, Dimon did not mince his words. He blamed
himself. He blamed the bank. He didnt point the finger
elsewhere. He fired the people directly responsible. He was
scathing in his assessment of his own institutions
ineptitude. It probably pained him to do it, but it worked
Dimon came out of a Congressional hearing with his
reputation enhanced and his position as strong as before,
despite losses that could reach $5 billion.
Diamond and Barclays made some of the right noises. But they
also made some ill-judged ones as well none more so than
to seemingly threaten to involve the UKs central
Sorry. We messed up. Thats all Diamond
needed to say. Fire the people responsible. Thats what
Diamond needed to do.
When he didnt, the board was left with little choice
but to ditch the horse it had backed so strongly. This is not a
time to be fighting regulators or politicians. Thats why,
less than 24 hours after Diamond wrote perhaps the longest
letter to employees in history, setting out exactly what he was
going to do to restore Barclays reputation, he finds himself out of a job.
Whats next for Barclays?
Barclays now finds itself in the extraordinary position of
having a chairman who has already resigned as acting CEO. What
a mess. Agius resigned to try to staunch the blood flowing from
his then chief executives office. It was never going to
work not when the front pages of tabloids such as The Sun were calling for Diamonds
Who takes over? In fact, what comes first a new
chairman or a new CEO? Youd have thought any chairman
worth his salt would want to have the final say in the
appointment of his new chief executive and the new
chairman of Barclays will need a cellar-full of credibility and
experience if he or she is to turn things round quickly.
For chief executive, it is not easy to find strong internal
Rich Ricci, head of the investment bank, is another US
investment banker, like Bob;
Jerry del Missier, who, just a few days before the Libor
fine was announced, moved out of the investment bank to become
group COO, may be Canadian but will be viewed similarly. But he
is expected to
follow Diamond out of the bank.
Both del Missier and Ricci are incredibly close to Diamond.
Ricci needs to be persuaded to stay on. He is loyal to the
institution, and he will know that the last thing his friend
and mentor will want to see, now he has left, is the
institution fall apart.
Tom Kalaris is another Diamond acolyte who grew up through
the investment bank, but has since made a strong impression in
the less controversial world of wealth management. Hes a
classy individual who would probably do a good job, but may
still be too close to Bob.
The other internal candidate would be
Antony Jenkins, chief executive of retail and business
banking. Hes British and not an investment banker, which
might give him a head start. He is seen by many as a solid,
reliable business leader but the trouble is, not by many
of the people at the old Barclays Capital that now dominates
the group. At Euromoney, weve heard various sneering
appraisals of Jenkins credentials for group CEO when
weve mentioned his name to traders and investment
bankers. Could Jenkins keep the group together and harness the