Yesterday after some bloke no-one has ever heard of quit as Barclays chairman I wrote:
Barclays is no doubt paying some bright PR firm megabucks to “manage this crisis.” So the company started with the idea that Diamond would forego his bonus this year. Now we have the bloke whose name I have already forgotten walking the plank even though he had no idea what was going on. And this afternoon we are being fed the line that the regulators knew about what was happening and thought it was a good idea. This is all aimed to distract us from calling for the head of Bob Diamond.
Hence, so far the scores on the doors are:
Cash cost to Barclays customers – a big number
Cash cost to Barclays shareholders – £290 million
Cash cost to the bloke whose name you too have already forgotten – nil. He will be seen as very honourable and a man happy to “take one for the team.” As a result he will get numerous job offers from other CEOs who can see the clear attraction of hiring an honourable chap as chairman who will always happily step forward to take a public rogering when other board members screw up.
Cash cost to the man who IS responsible (Bob Diamond) – nil. Offering to forego a future uncertain amount which is only a small portion of his future earnings is a small sacrifice and involves no actual cash going out of the door.
The PRs can spin, Diamond can bluster but it matters not. Bob is responsible as CEO and he will go. It is just a matter of whether his exit is speedy and undignified or protracted and horribly undignified.
Twenty four hours later Bankster Bob Diamond has now quit as well. But the fun is not over.
1. There will be calls for bankster Bob to repay bonuses earned on the back of profits inflated by LIBOR market abuse. I am not sure what the legal position is but I bet Bob has squirreled the cash away to a safe place already.
2.I always had Barclays as my prime short in a sector which I thought a short anyway. I very much doubt the group wide culture has changed. I still have no idea how Barclays Capital makes its large share of group profits. I sense that there is more to come here. Barclays remains the casino bank of the UK and I would not touch its shares with a bargepole.
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