Barclays May Spin-Off Investment Banking

Bloomberg reports that fifteen years later, his success in creating a top investment bank, whose profit reached $4.7 billion in 2011, may hasten its split from the lender after the London-based bank admitted to trying to rig global interest rates. Diamond quit as Barclays’s chief executive officer yesterday and hours later Chief Operating Officer Jerry del Missier followed.

Here's what the smart money's saying:

'Now is a very sensible time to pause, draw breath, assess what’s happened and look again at this question of a ring-fence or separation'.

Lord Hollick, a former major City player and member of the House of Lords Economic Affairs Committee, London Evening Standard

'Barclays should immediately split itself into two separate banks with their own, independent CEOs and float each on the stock market as soon as possible. This is the best possible way for the bank to get ahead of recent disastrous events and regain the initiative with the public, politicians, regulators, competitors and markets in general. Ideally, both new CEOs should be recruited from outside Barclays, perhaps from Canada, Australia or South Africa - countries where the reputation of banks has not been damaged in the way it has been in Europe and the U.S.'

MarketWatch

'Barclays management should begin talking to people about the costs and complexities around a break up'.

Gareth Hunt, head of European research at Canaccord Genuity in London, Bloomberg

'BarCap is likely going to be shrunk to greatness by whoever takes over, much like we’ve been seeing at RBS'.

HSBC analysts, The Financial Times

Not everyone is, however, in favour of a break-up

'I think they should sit back and relax. The investment bank is a top three in the world, no argument about it. Why on earth, having made this investment and a very good acquisition of Lehman Brothers, would someone come in and change their strategy ?'

Christopher Wheeler , a London-based analyst at Mediobanca SpA, Bloomberg