The new chief executive of Barclays plc, Bob Diamond, has told a Treasury Select Committee at the House of Commons that banks should not be bailed out by taxpayers and banks should be permitted to fail should they get into trouble.
"It is not OK for taxpayers to bail out banks," Diamond said at a hearing, citing that his company has not taken direct moneys from taxpayers.
"No bank should be a burden on the taxpayer - we have to make the system safer," he noted.
Diamond also said that bonus payments to bankers – an extremely contentious topic in an austerity-strapped Britain, should be "paid for performance, not for failure". He added that his bank has not yet decided if it will pay such bonuses this year.
The coalition government has urged banks to pay out smaller bonuses in an effort to be “sensitive to the public mood.’
Such sentiments by the governments had led to speculation that British-based banks might relocate elsewhere in order to escape any controls on bonus payments – however, Diamond said he was committed to remaining in London.
The chief executive further stated that Barclays was eager to increase lending in order to boost the British economy, although he emphasized that banks should lend responsibly to reduce risks.
"In 2009, we lent £35-billion more [than the prior year] and in 2010 we lent £35-billion more again in the first nine months alone," he said. "Lending is what we do. We like to lend."
However, Diamond also said that it was time for banks to stop apologizing about the financial crisis.
“There was a period of remorse and apology for banks - that period needs to be over,” he told the Committee. “We need banks to be able to take risk, working with the private sector in the UK.”
The British government is believed to be in discussions with the largest banks in the country to set a target for business loans – perhaps in excess of £200-billion, which would represent a 10 percent increase from estimated 2010 figures.