And talking of Lehman’s bankruptcy, I was intrigued to read an opinion editorial in the Financial Times written by Bob Diamond, the former chief executive of Barclays Bank. Bob of course pounced on the corpse of Lehman Brothers as it was drowning and made off with a succulent limb: the US broker-dealer operations.
As regular readers know, buccaneering Bob’s tenure at Barclays was not all plain sailing, especially when it came to relations with the regulators. There were heated discussions over the Protium transaction, quibbles over the emergency fund-raisings in 2008 and then the issues around the manipulation of Libor. Come to think of it, surely didactic Diamond lost his job because of a regulator? Last July, Sir Mervyn King, the governor of the Bank of England, insisted that Diamond had to take responsibility for the Libor scandal and step down.
It was therefore quite a surprise to read Bob’s piece, which comes across as a passionate plea for a “robust resolution regime”. In other words, a mechanism for winding down important financial institutions so that too-big-to-fail is no longer a problem. Diamond also urged regulators to introduce a level playing field for global banks: “Big banks must be subject to the same or very similar levels of capital, liquidity and leverage across all large markets.”