WHEN BOB DIAMOND took over as head of global markets at BZW in 1996 he was known as the senior fixed-income chap from CSFB who had been forced out after a division-wide dispute over the bonus pool. A year later he became CEO of what was left of BZW, renamed Barclays Capital, after the equities and corporate finance divisions were sold to CSFB. He was now the man with the near impossible job: how to make a decent business out of a debt markets division that seemed to be great in loans and sterling bonds but not a lot else. Headhunters claimed they had Diamond's staff queuing up in packs looking to leave.
Five and a half years later, it seems that Diamond has achieved the impossible. He's the investment bank CEO that his peers would like to be. He has held revenues steady, kept costs down and has posted a return on equity of just above or just under 20% for the past four years. He's free of the regulatory concern that afflict his rivals with equity businesses, and hasn't had to worry about making large-scale redundancies.