In opposition one of Vince Cable’s favourite pastimes was taunting Barclays and Bob Diamond, their investment banking chief.
“What must be clear is that if the directors of Barclays Capital, or its equivalent, want their bank to become the world’s largest casino that’s up to them, but only if there is no question of the British taxpayer guaranteeing it,” he thundered in one column.
Since becoming business secretary he has tempered his rhetoric a touch. But he’s still fond of calling Barclays a casino and it seems that Diamond, now promoted to chief executive, has had enough.
He told The Sunday Telegraph that it was “disappointing” to hear references to banks as casinos:
We will hear words like casino banking that have no basis in reality and generally come from people that don’t understand what a bank does and how important risk is in terms of the business we do with our clients. There is no empirical evidence that big is bad or big is risky. The reason that Barclays is a bigger bank than it was 10 years ago is because our clients are.
There is certainly no sign of political compromise there. Behind all this is also an implicit warning that attempting to split the bank’s retail and investment banking activities will force Barclays to leave London.
Tough talk. But, at least regarding the politics of banking, Diamond may do well to heed a warning from Boris Johnson, one of few remaining cheerleaders for big City bonuses.
The London mayor pointed out this morning that the “huge” City bonus season will coincide with the public spending cuts starting to bite. Given that the city was “implicated in the dawn of this crisis”, Boris’ advice is that Diamond and other must find “big visible ways” to support the less fortunate.
“They’ve got to understand the political consequences of doing nothing about the huge bonuses they are about to receive,” he said. It is probably sound advice.