The Fix by Vaughan Liam; Finch Gavin;

Author:Vaughan, Liam; Finch, Gavin;
Language: eng
Format: epub
ISBN: 9781118995730
Publisher: John Wiley & Sons, Incorporated
Published: 2016-11-17T00:00:00+00:00

Robert Edward Diamond Jr., Red to his friends, was born on July 27, 1951, the second of nine children. His parents, Anne and Robert Edward Sr., were Irish Catholic high school teachers who bestowed on their children a strong sense of civic duty but few of the connections and privileges that can help ease the path to success in high finance. The family lived in Concord, Massachusetts, an affluent, picture-postcard town where the first battles of the American Revolution were fought and the novel Little Women was set. Diamond walked to Concord-Carlisle High School every morning, where his dad was the superintendent. Five-foot-10 and stocky, he was a star linebacker until he injured his knee in college. Sport provided an outlet for a fierce competitive streak.

Diamond graduated with honors from Colby College in Maine before finishing first in his MBA class at the University of Connecticut. After brief spells as a lecturer and an analyst at a surgical equipment company, Diamond joined Morgan Stanley in 1979, the same year Gensler started working at Goldman Sachs. He was hired to help introduce computers to the investment bank's trading floor but quickly switched to trading bonds.

Diamond's entry into Wall Street may have been late, but he wasted no time once he got there. He became a managing director before his 35th birthday, and by the time he left Morgan Stanley for Credit Suisse First Boston in 1992, he was running the bank's European and Asian bond-trading operations. Diamond then moved his young family to Japan to become the Swiss bank's chairman, president and CEO for Asia. He was soon promoted to head of fixed income and currencies globally and given a seat on the executive board in New York.

In 1996, Barclays CEO Martin Taylor, an Eton and Oxford-educated former journalist, hired the 45-year-old Diamond to come to London and run the lender's securities and investment division. By then fixed income, currencies and commodities, or FICC as it's known in the industry, was driving profits at the bulge-bracket investment banks and Diamond was a rising star. One of his first moves was to sell the equities and merchant banking operations to concentrate on debt capital markets. That decision paid off when the dot-com bubble burst, equities plummeted and companies, governments and households increasingly turned to debt to fund themselves.

Taylor, now a policymaker at the Bank of England, went on to regret Diamond's appointment, claiming that his success came at the expense of the 325-year-old bank's reputation and was built on a disregard for internal controls. According to Taylor, Diamond had gone to Barclays's credit committee in the spring of 1998 to ask for a fivefold increase in exposure to Russian counterparties. “I cut the request back by roughly half,” Taylor wrote later. “They were disappointed, but within a few months the situation in Russia had deteriorated so much that no one was arguing about the credit ceiling.”3

When Russia defaulted on its debt that August, Taylor knew the bank was facing a serious loss, but he didn't realize how much.

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