‘We don’t hold banks – we feel banks have become so politicised,’ he said. ‘Since the financial crisis and bail-outs with Lloyds and RBS, there has been a popular movement in banker-bashing,' Bailey told Wealth Manager.
‘You’ve seen Stephen Hester mentioned with excessive pay packages, and Bob Diamond is a popular target given his big bonuses. Now there’s a popular cry to make someone accountable for what’s happened.’
Bailey said if Diamond was removed from Barclays, it would hit shareholders in the short-term.
‘If he was removed it would be damaging for the company,’ said Bailey. ‘He has built up a good reputation, which may have been tarnished with corporate excesses, but he has done a good job.
Earlier today prime minister David Cameron and chancellor George Osborne said Diamond had some serious questions to answer, while Labour politicians demanded the bank’s management team face a criminal enquiry.
However, Bailey said: ‘It’s not up to politicians to remove Diamond; it’s up to the shareholders.’
He added that it is perhaps of greater concern that Barclays' internal controls are not as rigid as they should have been.
‘So one of the reasons not to own banks is the highly politicised nature of the banking industry,’ said Bailey. ‘There is also the lack of clarity over loan books. And we don’t see the economy ultimately improving in the short-term. So banks represent a poor investment case.’
Yesterday UK and US regulators hit Barclays with a £290 million fine, for significant failings in relation to Libor and Euribor, seeking to influence the rate submissions of other banks among other actions.
Diamond said he would forgo this year’s bonus as a result. Barclays share price was down as much as 18% at one point today.They have since recovered some ground to stand 14.4% lower.