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London - The new boss of Barclays faces a grilling by British lawmakers over his pay and that of his staff on Tuesday as a row over the scale of banker bonuses heats up again.
Bob Diamond, who became Barclays chief executive at the start of the year after 14 years running the Barclays Capital investment bank, will be quizzed from 1000 GMT by Britain's Treasury Select Committee, a cross-party group of politicians assessing competition among banks.
Pay will be the hot topic, however, amid public anger at bonuses likely to total about £7bn ($11bn) in coming weeks. The government was not expected to clamp down hard on pay at the banks after a series of meetings, but instead seek commitments from them to lend to small businesses.
The row escalated after a weekend report that Stephen Hester, CEO of majority state-owned Royal Bank of Scotland, was set for a £2.5m bonus.
Diamond is one of the highest paid European executives - he earned £21m in 2007, but waived his bonus for the last two years - prompting some politicians to slam his promotion as rewarding "casino banking".
The American is likely to defend the universal banking model and say there is no need to split retail banking from investment banking.
But the new boss may opt to shrink his investment bank and other parts of Barclays with a radical shake up next month to ditch low return assets, analysts at UBS said this week.
"We think that only the man who built BarCap into such a dominant part of the group has the mandate within Barclays to rebalance the group away from the investment bank," UBS analyst John-Paul Crutchley said in a note.
