Barclays Diamond optimistic on fixed income

Fixed income trading powered banking industry's recovery from the financial crisis, but results dipped in the fourth quarter of 2009, causing some analysts to question whether the upward trend was coming to an end.

"We are very optimistic because governments need to finance. The sovereigns...need to finance," said Diamond, speaking to reporters while participating in the groundbreaking of the Barclays Centre, an 18,000-seat sports arena in New York City that will be home to Nets basketball team.

"That's a core of our business," he added.

Diamond, who heads Barclays investment banking and wealth management business, said regulators across the world are closer to resolving differences on financial reform proposals.

"We are much closer at a macro level to resolving the regulatory issues than it would appear, because there has been so much noise in the area and so much change," Diamond said. "I actually think we are close."

Diamond termed a Wall Street Journal report this week that Barclays was on the lookout to buy a retail bank in the United States was "speculation" and added he would not speak to reporters about such plans if a deal were in the works.

(Reporting by Steve Eder, editing by Leslie Gevirtz)