Investment Bank Could Shrink By 20%, Boss Relaxed If Staff Leave Over Pay

Sir David Walker, Barclays' incoming Chairman, told The Observer last week.

'We may still suffer some breakages (employees leaving), but if people are only doing it for the money, they are probably not the people we need', he continued.

Walker, 72, will have two main priorities on coming aboard at Barclays - restoring the bank's reputation after the LIBOR debacle, and sorting out the future of the investment bank (both in terms of its size and scope and the bonuses paid to professionals).

And The Sunday Times cited sources it didn't identify over the weekend who said that the unit previously known as Barclays Capital could be shunk by as much as 20%.

Walker, however, will be a man on a mission over pay. As the senior banker who led the 2009 UK government inquiry into the rules governing how banks are run (including recommendations for pay), Walker will now practice what he has preached - and that means long term incentives paid up to 5 years, less cash in bonus awards, and clawbacks on most everything. In fact, some think that Walker may actually come down even harder on Barclays, which has yet to fully implement the recommendations of Walker's report.

One banker told Here Is The City: 'Walker's appointment is 100% right for Barclays as a whole, but the investment bankers will have hoped for anyone but him. The good times on compensation look to be over for them (if not all of us!)'.