Good-Bye Bob

So, Bob Diamond is gone. No period of notice, no delays. Nothing. I suppose they will have a team working out how many millions he should get in severance pay. Now Barclays have to find a new Chief Executive as well as a new Chairman. That will not be an easy task. The departing Chairman, Marcus Agius has agreed to stay on until a new CEO has been appointed. In principle, the new CEO — be it man or woman — probably needs to be a banker but which banker will take on the job, which banker can we say is untainted by the activities of his/her own bank to date and what sort of remuneration package will he or she want. One will hope that the new CEO is not an investment banker. Also, surely this is a moment when we should take a step down the road to paying bankers proper salaries, incapable of being shuffled away through a tax haven and at proper levels — with minimal or no bonuses attached. If the Governor of the Bank of England is worth only £300,000 per annum and the PM Less than £400,000 [including the £57,000 forgone by the current incumbent plus an allowance for perks of the job], why does any banker think he is worth the £20,950,000 paid to Bob Diamond last year? But they do. No matter how bad the slime floating the surface, no matter what damage they do to the world's economies, no matter how much money they need from tax-payers and customers to keep their banks afloat, no matter how incompetent they are shown to be, they still believe that they have levels of expertise that demand absurd levels of remuneration.

But the job at Barclays is a poisoned chalice. The new CEO will be in the limelight from day one. We still do not know all the facts about the rate fixing and its consequences. Is it still happening? How much is going to have to be paid in compensation? The new CEO will have to tell us what is to be done to stop all this chaos of casino banking, fixing Libor rates etc. The government has to help out on this one by introducing legislation to ensure some of the manipulation will become impossible. Also, there is the matter of separating High Street banking from investment banking — and doing it now, not in eight year's time. Will Hutton — who knows much more about these matters than I do — was arguing in The Observer on Sunday that the trillions of dollars tied up in derivative products, that are used to make buckets of money for investment bankers, serve no real practical purpose. This must become especially true if the calculations are based on the Libor rates, which most of the gamblers know is a fiction. I say a fiction because it seems now that almost every bank contributing numbers to Thomson Reuters were lying, either to boost the rate higher or to keep it lower — and also to let everyone think that a particular institution was finding it easier to borrow money than was actually the case. Yet it is these derivative products that can collapse and bring a bank to the edge of the abyss — and in some cases take them over the edge.

Appointing a new CEO at .Barclays will not be easy but the new Chairman should be someone above all suspicion — and not a banker. The Archbishop of Canterbury, perhaps?

I remember the name of the Barclays Chairman as being not quite Marcus Aurelius. Marcus Aurelius was the last of the Five Good Emperors of Rome and ruled from 161 AD to 180 AD. He is remembered now mainly for his Meditations — a collection of his thoughts directed to himself. This is a long work in many volumes but one or two quite Biblical proposals seem quite suitable for the Chairman of a bank to observe :

"When you wake up in the morning, tell yourself: The people I deal with today will be meddling, ungrateful, arrogant, dishonest, jealous, and surly. They are like this because they can't tell good from evil."

"In the end, what would you gain from everlasting remembrance? Absolutely nothing. So what is left worth living for? This alone: justice in thought, goodness in action, speech that cannot deceive, and a disposition glad of whatever comes, welcoming it as necessary, as familiar, as flowing from the same source and fountain as yourself."

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