Diamond life

Barclays' new CEO Bob Diamond seems to have approached yesterday's grilling by the House of Commons Treasury Committee with the attitude that the best defence is a good offence. He and the assembled politicians largely talked past each other. The pols foamed at the mouth and made the points that had been scripted for them by their aides, but never seemed to pay much attention to Diamond's replies. As for Diamond, he concentrated on making a few key preconceived points of his own, none of which came anywhere close to the sort of apology or remorse that the politicians, or at least their constituents, might have appreciated. Diamond seems to have come out on top, judging by the media's grudging appreciation of his calmness and intransigence, as well as his mahogany tan.

He certainly got away with saying things that the committee could, if it hadn't been in such a righteous lather, have picked him up on. For example:

"Frankly, the biggest issue is how do we put some of the blame game behind us? There was a period of remorse and apology for banks – that period needs to be over. We need banks to be able to take risk, working with the private sector in the UK."

It's hard to know where to start with that little lot, but here goes:

* Does anyone else remember the "period of remorse and apology" that Diamond claims? Barclays itself may feel it had little to apologise for, inasmuch as it did not need a direct bailout, but one of the striking things about the crisis at its peak was the lack of any contrition from those who really did owe the country an apology, such as Fred Goodwin at RBS or Adam Applegarth at Northern Rock.

* "That period needs to be over"? Not for you to say, Bob, especially if you mean you want to go back to business as usual. As long as the taxpayer owns a big chunk of the banks and the Bank of England is continuing to provide unlimited low-cost funding, a bit more humility would seem to be in order.

* "We need banks to be able to take risk, working with the private sector in the UK". What's stopping you? The Bank of England's cheap funding was extended to allow exactly that, and politicians have been calling for it until they're blue in the face. Is Diamond suggesting that the banks are refusing to lend because they're cowed by public criticism? Do grow up, man!

According to The Independent, Asked if Barclays was "too big to fail", Mr Diamond said: "No, I don't think so. No bank should ever be a burden on the taxpayer. We have to make the system safer and more sound. It is not OK for taxpayers to bail out banks."

Again, where to start??

* Diamond is in a position of strength to the extent that Barclays was able to avoid accepting a government injection of capital at the height of the crisis. Even so, the assertion that "no bank should ever be a burden on the taxpayer" is a bit rich, considering that Barclays and all the rest of the banks are benefitting from ultra low-cost funding both from the Bank of England and from ordinary depositors, who are largely the same people as taxpayers.

* The astounding costs of the crisis strongly suggest that the premia the banks have paid in the past for deposit insurance were unrealistically low. That implies that all of the banks are always a burden on the taxpayer.

* As for making the system "safer and more sound", the Government has failed to advance any real ideas and if the banks themselves have big thoughts, they are keeping schtum. The one proposal that might actually make it possible to lighten the burden on the taxpayer -- separating retail banking from corporate and investment activities -- seems to be dead in the water, and would certainly be fiercely opposed by Barclays itself.

Bob Diamond and his colleagues are no doubt happy that he walked away unscathed yesterday, but neither he nor, more culpably, his interrogators did or said much to advance the public interest. A missed opportunity.