Is Barclays' Bob Diamond Actually a Legend?
The last time the boss of a major FTSE 100 company went in front of lawmakers to defend his actions, it went very badly.
Tony Hayward, the British boss of BP , faced a grueling onslaught from US politicians over his handling of the Gulf of Mexico spill and within minutes of the start you knew his days where numbered.
On Wednesday, the American boss of a UK bank went in front of some British politicians and gave a far better account of himself, admittedly while not facing the prospect of his company actually being destroyed by a regulatory backlash.
Bob Diamond, the CEO of Barclays , told lawmakers the time for "remorse and apology" is over and attempted to convince politicians that "we need banks willing to take risks, to be confident and work with the private sector in the UK to create jobs and improve economic growth." Diamond said he wished the bonus issue could go away.
He might just get his wish, as an expected media frenzy in this morning's UK press, failed to materialize, although there was anger at a couple of left-wing papers.
“No apologies. No restraint. No shame,” shouted the left-wing Independent on its front page.
“Do The Right Thing” the Mirror said, in relation to the ‘obscene’ £3 million ($4.68 million) bonus RBS boss Stephen Hester is set to receive.
But those papers seen as occupying the right or the center ground were much more restrained.
“Bank Chief Defiant over Pay,” the Daily Telegraph whispered at the bottom of its front page.
The paper that really matters in the UK since it has the highest circulation, the Murdoch-owned Sun, went with “Prem Star Blackmail Over Orgy with 3 Blondes.”
Before you ask, Bob Diamond is not a Prem Star, he may be paid the same as a soccer player but the point is the most widely-read paper in the UK had other fish to fry Wednesday morning.
The Terms of Peace
George Osborne, the UK Chancellor has laid out the terms what he describes as a peace accord.
Lower bonuses than would have otherwise been the case and increased lending to businesses.
“If the banks cannot commit to that, nothing if off the table” Osborne warned.
Well, Mr.Osborne, as you well know Bob Diamond and his peers can commit to this.
Bonuses will be lower than last year, as investment banking profits are lower.
Salaries have also been hiked at most investment banks to offset lower bonuses and smaller cash bonuses.
As for business lending, it has been so weak for nearly three years that raising the amount lent to firms should be relatively easy.
So in the absence of another major banking crisis, Bob Diamond could now be on the home leg of an amazing journey to the top of the global banking elite.
Having “failed” to win the battle for ABN Amro, a deal that was “won” by RBS and played no small part in making Fred Goodwin the most hated man in Britain two years ago, Bob Diamond went on to pick up Lehman Brothers US operations for a small fraction of what they would have cost just 12 months before the group's collapse.
There is no doubt that amid a lot of losers, Bob Diamond, has so far been a major winner of the financial crisis.
The public may not agree, but if he stays clear of trouble over the next few years and shows a little restraint on the bonus, his legacy in banking terms will be making a relatively small UK lender into a global giant that dominates London and New York.