Ken Lewis, the chief executive of Bank of America, has had his eye on Merrill Lynch for years. At the weekend, he finally got his chance to snap it up at what he thought was a knockdown price.

For years Bob Diamond, the ambitious head of Barclays Capital, has hoped to catapult the investment bank into the big league in the US. At the weekend, he finally got his chance to snap up Lehman Brothers, at what he thought was a knockdown price. At the last moment he stepped back from the brink, much to the relief of some Barclays shareholders. But last night, Barclays agreed to pay about $2 billion for Lehman’s US capital markets business, with about 9,000 employees.

Because Lehman in the US is now operating under Chapter 11 bankruptcy protection, Barclays can strip the business of the toxic real estate-related assets, which will remain with the holding company. Some Barclays shareholders are distinctly nervous about Mr Diamond’s ambitions, amid scepticism that Barclays Capital has weathered the credit crunch as well as it appears.

They also point to the Bank of England’s concern that the UK banking system is undercapitalised and wonder whether it would be keen on Barclays undertaking a risky expansion into investment banking in the US. But Barclays has kept the UK authorities closely informed of its plans and is expected to raise new capital to fund the deal.

The acquisition would create the third-largest investment bank in the US at a price that could turn out to be a steal. But Mr Diamond has a big selling job to do.

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