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Note: After snapping up Lehman, Bob Diamond is excited to be back in New York running a full-service investment bank. Can he take Barclays Capital to the top of the global bulge bracket?
Bob Diamond is no quitter.
The American-born bond trader took a job as head of global markets at Barclays's floundering investment banking arm, BZW, back in 1996. Barely a year later the British bank sold BZW's equity and corporate finance business to rival Credit Suisse First Boston for a pittance. Equity markets were soaring at the time, and the City of London was booming, but Barclays didn't have the stomach , or the capital , to compete in the investment banking business against the giants of Wall Street and continental Europe.
Far from giving up, however, Diamond dedicated himself to building up his rump markets business, renamed Barclays Capital, insisting that the firm could thrive as a niche fixed-income player. He spent aggressively to recruit a cadre of bond specialists from bulge-bracket firms and quickly made Barcap the dominant player in sterling bonds. Then he methodically built the bank's presence in Europe, betting , correctly, as it turned out , that the 1999 launch of the euro would spur a financing spree in the single currency. Earlier this decade he turned his attention to the U.S., hiring hundreds of bond traders, salespeople and analysts in a bold bid to take on Wall Street's behemoths on their home turf. Against the odds, Diamond succeeded every step of the way. By the end of 2007, Barclays Capital ranked an impressive sixth in revenue as a global debt underwriter, just behind Lehman Brothers and ahead of traditional powerhouses such as Morgan Stanley and Goldman, Sachs & Co.
Having prospered by focusing narrowly and building organically, Diamond changed form abruptly when the global financial crisis exploded in September 2008. He persuaded Barclays's board to make a daring bid for Lehman; then, when U.S. and U.K. regulators failed to backstop the offer and Lehman Brothers Holdings filed for bankruptcy, he arranged the pound(s)1 billion ($1.7 billion) purchase of its U.S. broker-dealer subsidiary and its Times Square headquarters.
At a stroke, Diamond added 10,000 bankers and traders to his U.S. staff of 4,000. More than that, he transformed...