Barclays investment banking boss Rich Ricci was in tears when he addressed his traders after the sudden exit of CEO Bob Diamond this week, as a rate-rigging scandal puts the future of his business on uncertain ground.
An interest rate rigging scandal at Barclays makes the separation or shrinking of its investment banking arm more likely, given greater regulatory and political intrusion and the exit of the trio of investment bankers at the top of the bank.
'The shareholder and political pressures on Barclays ... could lead to broader pressure on the bank to shift its business model away from investment banking and reform perceived failures in its business culture', ratings agency Moody's said on Thursday, threatening to cut its credit ratings.
'The case for separation grows', said Neil Dwane, Chief Investment Officer Europe for Allianz Global Investors, citing a 'cultural problem of entitlement to bonus and risk-taking', and also the management risks.
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In the meantime, The New York Post reports that it seems like only yesterday that Jon Corzine was the life of the party, holding court on the Hamptons political circuit, raising money for Barack Obama.
Now, Corzine - just months removed from a humiliating financial scandal - is persona non grata in the tony playground of the rich, and it’s clearly taking its toll, insiders said.
'He’s certainly not getting the invitations that he would have gotten before', a friend of his told The Post.