Diamond warns against 'Balkanisation'
Thursday 26 January 2012 - by Andrew Hickley
In an interview with Bloomberg on Thursday, Diamond highlighted the changing regulatory environment as a considerable challenge for the banking industry.
Diamond pointed to the UK's ring-fencing requirement as an "example of the Balkanisation" he referred to. He has been a fierce critic of the Independent Banking Commission's reforms, which will see a ring-fence being enacted between a bank's retail and investment units to ensure the safety of its customer deposits.
"We've been very public that we would've preferred a different route, that ring-fencing of the retail banking operations will increase the costs of retail and business banking in the UK," he said.
"But we've also been very clear that the decision has been made, we're moving on and we're beginning to implement."
Additionally, the 60-year-old admitted in the interview that "the best decision" Barclays had made during his time at the bank was during the fourth quarter of 2008 when the bank decided to raise its core equity levels to above 10 per cent despite the poor state of the global financial system.
While he said the move hurt the bank's profits in the short-term, it "allowed us to put up a sign everywhere saying that we are open for business - there's no issue about capital," he said.
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