With the 10-year anniversary of the collapse of Lehman Brothers
just two days away, many key figures from the financial crisis
have taken the opportunity in recent days to reflect on their
part in it.
Most have spoken of their regrets from the time, but largely
struck a positive tone on the changes to the financial system
that have occurred since then to make the world safer.
Former Barclays CEO Bob Diamond has struck a slightly different
tone, however. He said in an interview on Thursday that banks
need to be taking more risks today, not fewer.
“If they are totally without risk, they are not helping create
jobs and economic growth,” Diamond said in an
interview with the BBC.
“The culture of banking now is that if anyone makes a mistake
they get fined — or the bank is in trouble.”
Diamond, was head of Barclays Capital arm during the crisis,
before becoming its CEO in 2011. During his time at the bank,
Labour party grandee Peter Mandelson famously labelled him the
“unacceptable face of banking.”
He left Barclays in 2012 amid the LIBOR rigging scandal and is
now involved with Atlas Mara, a financial services firm focused
on Africa, which he cofounded in 2013.
Diamond told the BBC that all banks should not be lumped together
when it comes to assessing the crisis. British lenders like
Barclays and HSBC should not be compared to those that needed
government aid like Lloyds and RBS.
“I think HSBC and Barclays deserve credit for raising capital
privately,” he said. “People should be angry with RBS for failing
in the way it did — ten years later people still haven’t got
their money back. Private investors who put money into Barclays
have seen very good returns.”
In need of funding during the crisis, Barclays turned to the
wealthy middle eastern state of Qatar to secure a £12 billion
($15.6 billion) package. The deal was investigated by the UK’s
Serious Fraud Office (SFO) after it emerged that Barclays
provided a $3 billion loan to the state of Qatar in the same
year. Charges of conspiracy to commit fraud were brought against
the bank but
thrown out earlier this year.
One of the biggest retrospective criticisms of financial
institutions in the run-up to the crisis is that they had
cultures that placed profits above anything else. Diamond has
always denied that this was the case at Barclays, and used his
BBC interview to reiterate that.
“I don’t think the reprehensible behaviour of a few people out of
160,000 employees is representative of the culture we had at
Barclays. I think we had a very strong culture,” he said.
Diamond also defended himself and Barclays from accusations
during the crisis that they were involved in “casino banking” —
the now infamous charge
levied by Liberal Democrat leader Vince Cable in 2010 during
his time as business secretary.
“Labels like casino banking are very pejorative and very
unhelpful and don’t describe the reality. Vince Cable was wrong,”
Diamond told the BBC.
“We have asset managers managing pension funds who need access to
liquidity. We have companies hedging their foreign exchange
exposure. Sit on a trading floor and you’ll see the real value
this brings to the economy.”