In a statement this morning, Diamond said he was quitting as a result of the rising political pressure to do so, which ‘has reached a level that risks damaging the franchise. I cannot let that happen.’ He also added that he was ‘deeply disappointed’ by the ‘impression’ created by the Libor rigging scandal, claming that what it suggests about the behaviour of Barclays staff ‘could not be further from the truth.’ The boss should stand up for his staff of course, but that’s a version of the story which many will find hard to credit. It’s not impressions so much as actions that have been causing all the fuss.
What a difference a day makes. Only yesterday the Diamond seemed determined to stay put, the announcement that chairman Marcus Agius was to fall on his sword intended to protect Diamond and buy him some time. But this morning it’s all change - in a remarkable volte face, Diamond is now set to depart while Agius will stay on as full-time chairman, with the unenviable task of finding a replacement chief executive. MT would have liked to be a fly on the wall of the Barclays boardroom when Diamond broke the news to his fellow directors last night.
The announcement by the government of yet another inquiry, this time into the culture and practices of the banking industry, may have had a bearing on his decision, Diamond apparently fearing the damage that remaining in charge under such circumstances might cause to the firm. Although the putative inquiry is itself running into trouble, with Labour currently refusing to support it and the preferred chairman, Conservative MP Andrew Tyrie, unwilling to take the job without cross-party support.
Here at MT we are not sure that an inquiry into culture will achieve much anyway – cultural change is an emergent property dependent on leadership and business models. And we already have a full set of proposals to change the business model of banking in this country from the Vickers report. Political energies might be better devoted to executing its recommendations rather than muddying the waters with yet more public hand-wringing.
All the same, it’s a dramatic end to Diamond’s 15 years with Barclays, a career which may well come to be seen as defining the rise and fall of an entire generation of investment bankers. For most of that decade and a half, Diamond was the undisputed star of the show, building BarCap into a force to be reckoned with before taking on the overall top job only 18 months ago. Since then rows over his pay and the behaviour of staff – and his own apparent unwillingness to change - have constantly dogged him.
His departure is likely to mark the end of an era for Barclays, if not the entire industry. Business as usual is ever-harder to defend in a financial sector which has incurred public and poltical wrath by spending the last 4 years scaling increasingly eye-popping heights of self-serving and dysfunctional behaviour.
Meanwhile Agius’s overnight reinstatement must be one of quickest re-hires in corporate history – although to be fair he was intending to stay on in the short term anyway. But now he finds himself with the tricky job of kingmaker. Potential internal candidates include current boss of investment banking Rich Ricci, and Anthony Jenkins, head of Barclays' retail arm. In the current climate, Jenkins has got to look like the better bet, although an external hire is also of course a possibility.
So it’s farewell to Bob Diamond, but the Libor affair itself is likely to rumble on for quite a while yet. There will be bosses in the boardrooms of other banks today wondering what will happen to them when it emerges that their traders were rate fixing too.