Bob Diamond is out at Barclays (NYSE: BCS ) and now, Anthony Jenkins is in. As a change of pace for the British bank, it couldn't be starker. If Bob Diamond is your butterscotch sundae with the works, and maybe even a lit sparkler or two jammed in there, Jenkins is your standard cup of soft-serve vanilla (hold the sprinkles).
The move is clearly what Barclays -- reeling from the LIBOR rigging scandal and, more recently, questions over dealings with Qatar's sovereign wealth fund -- needed, though it wasn't a foregone conclusion that it would make such a change. But does this change of guard at Barclays say something about the global banking sector more broadly?
Bob Diamond was a bombastic American investment banker. Anthony Jenkins is a quiet Brit that ran Barclays' consumer-banking operations. I could be forgiven for thinking that it looks like Barclays is turning its back on the recent decade's global banking mandate of stacking riskier, more profitable services on top of run-of-the-mill banking to make mega-ultra banks.
And this certainly isn't the only instance of this. Citigroup's (NYSE: C ) CEO Vikram Pandit called the "supermarket banking" model "a strategy that I don't believe is right for the times." He went on to say that Citi has gotten out of that particular strategy and now focuses "on what is really the core banking business of this institution."
Sounds great, right? Who needs new regulations if the free market takes care of the problem itself? Heck, even JPMorgan Chase (NYSE: JPM ) will likely have a more sober approach fresh off the walloping it took from the tail of the London Whale.
OK, OK, snap out of it. While it all sounds good, there's little reason to believe much of this is meaningful. Sure, a sober, fresh-faced Brit at the top at Barclays will do a lot in its efforts to muck through the disaster that its regulatory missteps have caused. As for Pandit, I don't know what he's smoking, but the Citigroup of today looks nothing like the Citicorp of the pre-Gramm-Leach-Bliley period. In the second quarter, 54% of Citigroup's Citicorp division -- the non-toxic part of the bank -- was from the institutional clients group, which includes investment banking, trading, hedge funds, and structured products.
Sure, we could trust the bankers and assume that Barclays' CEO choice is a shining example of how big global banks are, of their own volition, getting back to being, well, banks. Or, we could continue to concern ourselves with the fact that less than a decade after Gramm-Leach-Bliley shoved aside key Glass-Steagall prohibitions, the country's entire financial system was going all Chernobyl on us.
Call me crazy, but I'm inclined to think leaving it up to the bankers is not the way to go.