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Vince Cable attacks appointment of Bob Diamond

As many people have expected, Vince Cable the coalition government's business secretary has today attacked the forthcoming appointment of Bob Diamond as chief executive of Barclays Bank group. He believes that by mixing those with investment banking and retail banking experience there may be further problems ahead for the UK banking arena unless some of the larger corporations can be broken up.

However, the very fact that Barclays Bank has announced a Bob Diamond as its chosen successor for the role of chief executive shows that there is little or no fear regarding a potential breakup of the UK banking sector. The main problem for UK government has is the fact that the risk reward ratio in investment banking and retail banking is very different. There is concern that these two very different operations will not sit well together and like we saw in the credit crunch and worldwide recession, excessive risk-taking can have extreme consequences.

Surprisingly the stock market has not welcomed news of Bob Diamond's forthcoming promotion with Barclays Bank shares down since the announcement yesterday. Whether this is concern about friction between the banking arena and the UK government in the future or indeed the actual appointment of Bob Diamond is open to debate.

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