Barclays is retreating from the world. Here's why Britain should welcome that

“Retreat, retreat, retreat!”

That’s my translation of what Barclays chief executive Jes Staley said in his latest interview with Bloomberg.

The American – a 180º switch on his prickly empire-building countryman Bob Diamond – has walked the investment bank out of seven countries in the past nine months. He has sold down the bank’s stake in Barclays Africa, shaken up his management team, cut 13,600 jobs.

This we know, and so the interview didn’t tell us anything terribly new. But it did focus attention on what is happening at Barclays, and why it’s a thoroughly good thing for the bank’s silent partners as well as its shareholders. They are, in case you were wondering, the taxpayers of Great Britain plc, who will be called upon to bail Barclays out should anything go seriously wrong.

Mr Staley was hired to replace Antony Jenkins who had succeeded Mr Diamond with a mandate to clean house, but who sometimes seemed fonder of giving glossy presentations on his strategic plans than he was of actually putting them into effect.

Despite earning his banking spurs at multi-national behemoth JP Morgan, Mr Staley quickly set out his stall to do something different with Barclays. He would create a focused transatlantic retail and investment bank with the aim of racking up returns for shareholders as opposed to racking up air miles. Then he set about doing it.

Just as Barclays is no longer the multinational powerhouse it was when it reached its zenith under Mr Diamond, the British economy is no long the multinational powerhouse it was when the country was at the height of its power a couple of hundred years ago.

There will be some pain along the way, but a lower risk Barclays with more modest ambitions works better for Britain’s current modest circumstances, just as it ought to work better for shareholders (who have benefited from a steadily rising share price since Britain's disastrous vote to quit the EU).

It works for Britain because all the living wills, duties of responsibility and ring fences insisted on by regulators haven’t changed the uncomfortable fact that if a bank goes bad, the taxpayers of its home nation get hit in the pocket.

One thing that does make bail-outs less likely is the creation of more modest and more manageable banks. Like Barclays is becoming.

Every now and then people like to look at the league tables in publications like The Banker, that rank the world’s biggest banks. They will then lament the lack of UK (and European) entries in top 10s dominated by America and, especially, China.

But so what? America and China are the world’s biggest economies and the world’d biggest economies are better positioned to absorb collapses of the world’s biggest banks (although the rest of us wouldn’t be free of collateral damage).

A lower-risk Barclays works for shareholders because they tend to lose out when banks indulge in empire building that best serves bankers and banking executives. They have to pay up when the banks they own encounter banana skins and get landed with huge fines for not spotting them. Just look at globe-trotting HSBC, which has proved just how easy it is for problems to emerge and then blow up at quite small operations in far-flung parts of the world. Mexican money-laundering, and Swiss tax-avoiding to name but two.

It is to be hoped that a leaner Barclays will be less likely to find itself in that sort of hot water, or the type of hot water it has too often found itself in in the past. So carry on back-pedalling Mr Staley.