AFR in the News: The Volcker Rule and Barclays’ UK Bear Hug

The Volcker Rule and Barclays’ UK Bear Hug – Nick Dunbar
November 15, 2011

“On Nov. 3rd, I attended the inaugural BBC Today Business Lecture, given by Bob Diamond, the chief executive of Barclays. The man who told the UK Treasury Select Committee that it was time to stop apologising for the financial crisis had been given an image makeover. Taking an ingratiating tone towards his audience of BBC worthies, MPs and journalists, Diamond used words like ‘trust’, ‘citizenship’ and ‘responsibility’. Oozing contrition and sincerity, he peppered his speech with well-calibrated examples of Barclays helping business clients. Diamond seemed hurt when I stood up at the end and pointed out that Barclays’ track record of selling over-complex products and exploiting opaque balance-sheet tricks made it hard to believe him. The more I thought about it, aside from the change in tone, there was not a great deal of difference between the unrepentant Diamond addressing the Treasury Committee and the contrite version lecturing the BBC. What did nag at me after the lecture was why he was taking the trouble: in particular, publicly disavowing any threat to move Barclays to the US. The answer came to me last week, when I visited Capitol Hill in Washington DC to give a presentation of my own on the implementation of the Volcker Rule, which bans proprietary trading by US banks. I was invited by the legislative counsel for Sen. Jeff Merkley, one of the architects of the original Volcker Rule bill, and… Americans for Financial Reform.” Click here for more.