JOHN Varley, the chief executive of Barclays, yesterday reiterated his defiant stance against calls for a break-up of the group’s retail and investment banks, challenging them to “bring science to the table instead of emotion”.
Varley, who has been a vocal opponent of US President Barack Obama’s proposals to split up major banks, said he could recall no instance of a correlation between bank failure and the combination of retail and investment banking in the past century.
“There is no evidence that [universal banks] are more risky and prone to failure – indeed, I would say the reverse is true,” Varley said. “It’s very important these judgements are made not by reference to emotion but by empirical evidence. That evidence is clear: universal banks are diversifiers of risk, not aggregators of risk.”
Barclays said it had targeted an “optimum shape” for the group to achieve over coming years, with two thirds of the group focused on retail and commercial banking and just a third from investment banking.
Varley’s firm defence of Barclays’ business model came after Liberal Democrat Treasury spokesman Vince Cable called for banks to be broken up, supposedly to mitigate risk for taxpayers in the case of future crises.