Why Do Investment Bankers Run Europe But Not The US?

John Gapper points out that the elevation of Bob Diamond to the top of Barclays indicates that the financial crisis hasn't stalled the rise of investment bankers in Europe.

Bob Diamond
Bob Diamond

From the Financial Times:
Mr Diamond’s appointment as the next chief executive of Barclays means that investment bankers will now head four of the biggest European banks with global reach.

Mr Diamond joins Josef Ackermann at Deutsche Bank, Oswald Grübel at UBS and Brady Dougan at Credit Suisse. Despite the massive losses incurred by the corporate banking arms of some commercial banks -including UBS - during the 2008 crisis, investment bankers remain in charge.

This does seem odd, given that the retail banking sides of universal banks were relatively blameless during the crisis. You might have thought that the retail bankers would have reasserted control over the highly-rewarded risk-takers.

Instead, the boards of banks clearly think that investment banking will stay a vital part of their businesses, and they need people at the top who understand it.

Mr Diamond, who built up Barclays Capital more or less from scratch, no doubt deserves his prize, but the hegemony of investment bankers is breathtaking.

Interestingly, this hegemony does not appear to hold sway in the US.

Bank of America is led by a former general counsel turned wealth manager head. We'll call him a retail brokerage guy. JP Morgan Chase is led by Jamie Dimon, who has spent his career building huge retail banking operations. Citigroup's Vikram Pandit is a trader, asis Goldman's Lloyd Blankfein. James Gorman is almost an investment banker but he's really a high-powered consultant. The purest investment banker running a prominent US financial institution might be John Thain, who has been installed at the top of CIT .