'Citizen banker' Bob Diamond defends executive pay

Bob Diamond was forced to defend his salary this morning, after he failed to mention the subject at a high-profile lecture last night.

The Barclays CEO used his address at the Today Program business lecture to argue that bankers needed to become "better and more effective citizens".

But after being challenged on the Today Programme this morning, he said that any bonus on top of his basic salary of £1m "was up to the board", not the public mood. Diamond was paid a £6.5m bonus in March this year.

"We certainly understand that there's a debate about executive compensation," he said. "With my role as chief executive comes a responsibly to both be responsible, but also to operate competitively."

Diamond added that banks needed to "rebuild trust" with the public and adopt a "cuddlier" image after the events of the last three years, and accept responsibility for what had gone wrong.

"We need the belief that banks can fail without creating systemic risk," he said. "I think if we could remove the phrase ‘too big to fail' from our lexicon."

Regulators needed to work harder to create a system where banks could fail without risk to the consumer, he added - and the FSA was currently not in this position.