Cable hits out at Diamond appointment

Vince Cable has voiced concerns over the appointment of Bob Diamond as the new Barclays chief executive, fuelling the row over whether big banks should be broken up.

Diamond, currently head of Barclays Capital, replaces John Varley at the end of March but it is understood the business secretary thinks the appointment highlights the dangers of combining "casino" investment banks with traditional banks.

Cable has long warned of the dangers of combining investment and retail banks, campaigning in the run up to the general election for the big banks to be broken up.

He is currently overseeing an independent commission examining whether high street banks should be separated from their investment arms.

News of the appointment has spooked investors, with Barclays' share price down 3.38% this morning.

The furore surrounding Barclay's new appointment coincides with the controversial resignation of HSBC executive chairman Stephen Green to take up a new government role as trade minister. Green has previously expressed concern over Cable's idea to break up big banks.

HSBC recently warned UK banks could relocate overseas should the government decide to break up the country's banking giants.