David Prosser: Bob Diamond joins the investment bankers running Britain's banks

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Outlook It is almost two years to the day since the British Government, via the Financial Services Authority, effectively vetoed Barclays Bank's plan to buy Lehman Brothers, condemning the failing American investment bank to collapse. And although Bob Diamond, the Barclays man championing the takeover, was furious, he has much to be grateful for. Had Barclays been saddled with Lehman in its entirety, its ability to ride out the rest of the financial crisis would have been in question. Instead, it bought Lehman's choicest assets at a knock-down price and Mr Diamond came up smelling of roses.

Still, bankers tend to have short memories. Fast forward to the present and it is safe to assume that as the newly appointed chief executive of Barclays Bank, Mr Diamond is once again chafing at the prospect of his style being cramped by the regulators. If the Government-appointed Independent Commission on Banking suggests British banks should no longer be able to combine both retail and investment banking operations, and if the Chancellor accepts that proposal – both big ifs – one of Mr Diamond's first acts will be to relocate Barclays to the US.

So it should be. For a number of years now, Barclays' investment banking operation has been both the main driver of the bank's growth and the provider of the most substantial part of its profits. Any business leader told he must dispose of a division of his operation would be crazy to offer up the star performer. So, should those ifs become reality, expect Barclays to become a US-headquartered investment bank that sells down its stake in a British retail operation to whatever level the regulators deem necessary.

That, by the way, is not to say that the Commission on Banking or the Treasury would be wrong to break up the banks. Their views must be informed by the issue of financial stability, not the commercial interests of Barclays, however desirable retaining the bank in Britain might be judged. The threat of withdrawal by Barclays, HSBC, or others, should not cloud the conclusions of reviews of British banking regulation.

Still, if George Osborne has somehow failed to notice that investment bankers are now in the ascendancy in the banking sector, despite their starring role in the worst financial crisis in living memory, his new colleague in Government will no doubt be able to fill him in.

In quitting HSBC for a new post as trade minister, Stephen Green is leaving the chairman's office open for his chief executive Michael Geoghegan. Mr Geoghegan, already the favourite to succeed Mr Green, would most likely be replaced by Stuart Gulliver, HSBC's investment banking chief. With Stephen Hester, a veteran Credit Suisse man, already in post as Royal Bank of Scotland's chief executive, three of Britain's four big banks could soon be run by career investment bankers.

Even the exception, Lloyds, which has little in the way of an investment banking operation, is chaired by Sir Win Bischoff, who made his name in – you guessed it – investment banking.

This cannot have been what Vince Cable, the Liberal Democrat Business Secretary, was hoping for when he said in February that "some banks appear not to realise that they had a near-death experience". But then Mr Cable, whose duties include a particular focus on banking, will not be the Government minister who decides which of the Commission on Banking's proposals to accept. That right, the Treasury has made it clear, will be the Chancellor's alone.

It is possible that the dominance of investment bankers in the boardrooms of Britain's biggest banks is a sign they believe Mr Osborne will not be as aggressive as Mr Cable might want. More likely, however, is that this trend, which you will see across much of Europe too, simply reflects where the money in banking is to be made nowadays – and the relative indifference of international companies to where their headquarters are sited.

Bank shares were down across the board yesterday, chiefly on rumours that the Basel III agreement, the new global accord on banking standards that is set to be finalised later this week, may be tougher than expected. From that threat, there is no prospect of remission for any of the international banks.

The small matter of the British approach to banking regulation, by contrast, is a parochial concern. "Little England", Mr Diamond might say, as he notoriously did the last time the Government had the effrontery to thwart his plans.