Barclays CEO Addresses Future Economic Environment
Robert Diamond interacts with a student following his presentation.
Before an audience of mostly economics majors in a full Ostrove Auditorium on October 15, Robert E. Diamond ’73, CEO of Barclays Capital and chair of Colby’s board of trustees, spoke on Mayflower Hill about the current state of Wall Street and what to expect moving forward in the global economic climate. Diamond had recently returned from the World Bank meetings in Istanbul and spoke on a range of topics, from the fundamental changes taking place in international markets to the inner working culture at Barclays.
Citing the fact that in the first half of 2009, G10 nations suffered a 3.5 percent drop in GDP, Diamond emphasized that “banks now face an unprecedented series of challenges, such as significant write downs, capital raising, regulatory stress tests, liquidity, and compensation.”
“The question for the economist is what are the summations of these changes and what is the impact on credit and the economy,” he said.
Noting that the original goal of Freddie Mac and Fannie Mae was to offer affordable mortgages to middle-class Americans, and the fact that this attempt spiraled out of control, Diamond pushed for more control in the future—and on the international level as well.
“A lot of things that happened in the weaker banks could’ve been avoided with stronger, more intrusive, more constant regulation,” he said. “We need a regulatory environment where there is a level playing field and an interconnectedness across geography. There is a tendency for banks to not be part of regulatory reform.”
Diamond outlined that such reform must foster two interrelated elements: a safe and sound financial system and one with healthy banks able to assume risk. “We all want strong, confident banks that are willing to take risks across borders in international trade,” he said.
Sitting in the front row of the auditorium, in a building named after the man at the podium, were several of Diamond’s current employees—some of them recent Colby graduates or current Colby students with internships. After introducing the assembled constituents, Diamond outlined his goal for Barclays Capital itself: to become the world’s premier investment bank.
“I love coming to work every day,” he said, and, considering Barclays’ September 2008 acquisition of Lehman Brothers and 10,000 new employees, he added that it was a positive sign that at Barclays “the culture has not changed.”
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