LONDON BRIEFING:THE REMARKABLE rise, fall and rise again of the investment banker is perfectly encapsulated in US-born Bob Diamond's elevation to the post of chief executive of Barclays.

Dubbed “the unacceptable face” of banking by Lord Mandelson (who knows a thing or two about social pariahs), Robert E Diamond jnr is one of the most high-profile bankers in the world. And he is certainly one of the most lavishly remunerated, hence the Mandelson comment, was made earlier this year after it emerged the head of Barclays’ investment banking business stood to collect £60 million over the coming years.

Mandelson, then business secretary, criticised Diamond for receiving the money “not by building or adding value or creating long-term economic strength” but by “deal-making and shuffling paper around”. But it was deal-making and shuffling paper that saw the investment banking side produce almost 90 per cent of Barclays’ profits over the first half of this year while its traditional high-street banking operations lagged behind. From next March, when John Varley steps down, Diamond will be in overall charge of both sides of the business. In taking the top job, he will take a pay cut, as his base salary rises but his bonuses are scaled back. That is unlikely to worry Diamond (59), who is thought to be worth little short of £100 million. Investment bankers may still be regarded as public enemy number one, but Diamond was always going to get the top job at Barclays after helping to steer it through the financial crisis without having to take a direct bailout from the government.

Things would have been very different if Barclays, rather than Royal Bank of Scotland, had won the auction for ABN Amro, but instead it bought Lehman Brothers out of collapse, a move regarded by many as the deal of the century. News of Diamond’s appointment, which comes as the second anniversary of the collapse of Lehman Brothers approaches, provoked an angry reaction from the unions. It was, said GMB general secretary Paul Kenny, like “sticking two fingers up” at the taxpayers who rescued the sector. “This is about as insulting and divisive as it gets,” he added.

Entrusting the stewardship of one of Europe’s biggest banks to a fully paid-up member of the “casino banking” club would have seemed extraordinary at the height of the crisis. But they’re not known as “masters of the universe” for nothing – financial crisis or not, it’s the men who make the money that always call the tune.

The clue to the extent of Willie Walsh’s grand ambitions once British Airways completes its merger with Spanish carrier Iberia is contained in the seemingly anonymous name chosen for the enlarged business – International Airlines Group.

Far from showing a lack of imagination, the name indicates Walsh’s aim to build a global airline group that will soon move far beyond anything named BA-Iberia or BAI. The former Aer Lingus pilot’s revelation at the weekend that he has a shortlist of a dozen airlines in his sights sent a frisson of excitement through the industry, with Asian and Latin American airlines topping the list of rumoured targets.

Those airlines that have survived the recession are aware that the industry is in urgent need of consolidation – and Walsh believes he’s the man for the job. He revealed his plans to create the world’s biggest airline in Mumbai over the weekend, as BA announced a tie-up with India’s Kingfisher Airlines.

Kingfisher is one of the potential targets, as is Chile’s LAN Airlines, a member of BA’s Oneworld Alliance. Although Walsh gave no names for his dozen targets, other Oneworld members such as Japan Airlines, Finnair, American Airlines, Cathay Pacific and Qantas are almost certainly on the shortlist.

As BA found two years ago when it failed to merge with Australia’s Qantas, deals in the airline industry can be horribly complex and are fraught with regulatory difficulties. But Walsh believes restrictions over foreign ownership of national carriers will ease as the need for global consolidation becomes more pressing.

The deal with Iberia is due to be complete by the end of the year, after which we’ll see who is at the top of Walsh’s list. In the meantime, much of Walsh’s attention will be taken up with securing a permanent solution to BA’s increasingly fraught union problems – striking staff and irate passengers are not the best backdrop to any merger talks.

Fiona Walsh writes for the Guardian newspaper in London