Bob Diamond resigned from Barclays on July 3 and as I write this, some three weeks later, bankers are starting to talk in hushed tones about the “Libor rigging scandal” being the financial industry’s “tobacco moment”.
A number of senior bankers have been paraded in front of the House of Commons Treasury Select Committee and had metaphorical tomatoes thrown at them. Jerry del Missier, the former Barclays’ chief operating officer, was accused of monumental incompetence.
Paul Tucker, deputy governor of the Bank of England, was scolded by the committee chairman, Andrew Tyrie. “This doesn’t look good, Mr Tucker,” Tyrie tut-tutted, obviously having missed his true calling as a headmaster. And even Marcus Agius, the chairman of Barclays who resigned and then reinstated himself the next day, was mauled.
The Barclays saga is starting to resemble a Shakespearean tragedy, maybe a comedy, and I suspect that we are only at the end of Act I. Other bankers are mesmerized. They are stunned at how rapid the fall from grace has been.
A few weeks ago, Barclays was a feared competitor, now it is a stunned whale drifting aimlessly in the murky waters. In June, Diamond was living the dream, apparently protected from life’s harsher realities by his money and power. Now he is sneered at as ‘Bonus Bob’ or ‘Libor Bob’, and the Financial Times always prefaces his name with the adjective ‘disgraced’ as in ‘disgraced former chief executive Bob Diamond…’
However, Barclays’ competitors are also terrified. The vengeance wreaked on the bank has been so swift and so severe that rival bankers tremble for their own institutions. In the past few weeks, several chief executives have whispered to me that they have ordered a review of millions of emails relating to their own Libor-setting operations. Rumours that some sort of group settlement could be reached with the authorities disappoint me. Surely, any resolution should emphasize accountability rather than opacity?
Who is on the shortlist to be appointed as the next chief executive at Barclays? Bill Winters, the former co-CEO of JPMorgan’s investment bank, would be the obvious choice. But he is said not to want the job and to be happy running his asset management firm, Renshaw Bay. Other names that I have heard mentioned are Richard Meddings, finance director at Standard Chartered; Greg Fleming and Colm Kelleher, division heads at Morgan Stanley; and Jonathan Moulds, the outgoing president of Bank of America in Europe.
Although the board is meant to appoint the next CEO, I suspect the regulators will influence the decision. After all, the Barclays board is clearly incompetent. Surely, it is because of them and their naive trust in Diamond that the institution now lacks a chairman, chief executive and chief operating officer and risks dismemberment? No wonder big shareholders are demanding an outside candidate be appointed so as to ensure a complete break with the past.
Another relevant question is who, in their right mind, would want to take on the job? Two years of hard grind beckon and the Chosen One will have to endure puny remuneration and public hostility. The candidates might do well to cast an eye at another top UK bank, HSBC, where Stuart Gulliver, appointed some 18 months ago to the post of chief executive, must be tearing his hair out.
