Business

Barclays Bank boss Bob Diamond warns of 'social unrest'

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Media captionBob Diamond: ''Would I have chosen citizenship as a key priority five years ago? Probably not''

Barclays chief executive Bob Diamond has warned of "social unrest" unless the UK generates more growth and jobs.

From riots in Greece to protests at St Paul's Cathedral, anger was rising, especially among the young, he said.

Banks can play a key role to help, he said, but must also apologise for mistakes and show they can contribute to society.

He made the comments in the first BBC Today programme business lecture, and subsequent Radio Four interview.

"Governments in the UK, US and Europe are working to reduce spending, with varying degrees of success and varying degrees of public acceptance," Mr Diamond said.

"We've seen violent protests in Greece, public sector strikes across Europe, anti-capitalist demonstrations that started on Wall Street have spread to other places around the world, including St Paul's Cathedral here in London.

"Young people have been especially hard hit by high levels of unemployment.

"The threat of further social unrest remains if we don't work together to generate stronger economic growth and more jobs," Mr Diamond warned.

Banks must re-connect with customers and re-build trust, he said. He told BBC interviewer John Humphrys that banks could once again be seen as "cuddly" and "friendly".

But a lot of the demonisation of banks had been wrong, he said, citing criticism of financial risk-taking.

Risk-taking had an important social purpose, he said.

When banks put capital at risk, they were providing a market for buyers and sellers in all sections of society.

"Providing this kind of support to clients requires banks to take risk, but this is not speculative trading, so it bothers me when these activities are caricatured as gambling," he said.

"These activities serve a social purpose and meet a real client need whether they are carried out on behalf of governments, pension funds businesses or individuals."

The result was that banks played a critical role in supporting businesses and generating jobs and growth.

Learning from mistakes

Mr Diamond, whose total pay packet last year was worth £9m, also said banks should never again have to be bailed out by the taxpayer.

"No taxpayer money should ever again be put at risk to rescue a failed or failing bank," Mr Diamond said.

And he acknowledged in his radio interview that many people in society feel angry that no one has been held to account for the banking crisis.

"I understand why many people wonder if anything has really changed," he said.

UK taxpayers had to step in to bail out RBS and Lloyds Banking Group during the 2008 financial crisis, but Barclays did not take any direct capital.

He felt that Barclays itself had been unfairly tarnished by the failures of other banks.

Accusations that bankers were "gamblers" or "volatility junkies" could not be applied to his company, he said.

But he accepted, too, that Barclays had had its problems, with the mis-selling of payment protection insurance, for example.

"We have not done a good enough job. The number of complaints is too high.

"We can learn from those mistakes, apologise, and make sure it never happens again," Mr Diamond said.

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