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Barclays chief tells MPs – don’t bail out banks

Barclays chief executive Bob Diamond says taxpayers should not bail out banks.

Giving evidence to the Treasury select committee this week as part of its inquiry into competition and choice in banking sector, Diamond said the regulator should be able to wind down banks that run into trouble.

He said: “No banks should ever be a burden on the taxpayer. We have to make the system safer and sounder and I think that is about risk management and the capacity to absorb losses. People talk about the need for regulators to be able to unwind an institution in short order and we agree with that ambition.”

Diamond said he recognises the benefits for the banks and the wider economy that came from the financial stimulus but said Barclays did not take “a penny of taxpayers’ money”.

Conservative MP Andrea Leadsom said Diamond is “in denial” about the extent to which taxpayers supported the banking sector, after he would only go as far as saying he was grateful to central banks for their support.

Diamond said Barclays recognised the need for bonus restraint but warned that reducing bonuses would have an effect on banking services and the ability to attract staff.

Diamond waived his bonus in 2007, 2008 and 2009 but refused to say he would waive this year’s bonus, adding he has not yet been awarded one. Decisions on remuneration are to be taken by the bank in the next few weeks.

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