Barclays chief warns he will fire staff found to have failed on standards
BARCLAYS BANK chief executive Bob Diamond told staff yesterday he was sorry for the Libor rate-fixing scandal that has plagued his bank and caused his chairman Marcus Agius to stand down.
Saying he was angry about the scandal, Mr Diamond added he would fight to show the bank’s employees and the outside world the scandal was not representative of the culture of Barclays and that the bank would fire individuals found to have failed to maintain its standards.
Barclays, he continued, was not the only bank to have acted in the way revealed by the regulators – although so far it alone has been punished.
Barclays was fined a record £290 million (€362 million) by British and US regulators after admitting its traders had sought to manipulate the rates which underpin $350 trillion (€278 trillion) of contracts around the world.
Mr Diamond’s defence of the bank came as prime minister David Cameron said a full parliamentary inquiry would be held into the scandal and into standards in the banking industry, with witnesses called to give evidence under oath.
The joint inquiry by peers and MPs will report by the end of the year and will be led by Andrew Tyrie, the Conservative chairman of the Commons Treasury select committee. The committee is due to question Mr Diamond tomorrow.
In his letter to staff, Mr Diamond, who has faced repeated calls from politicians and bank critics to quit, said: “No one is more sorry, disappointed and angry about these events than I am.” Despite the position he took that these were failures which belonged to the past, he added it was still necessary to “take appropriate action against those involved”.
Mr Diamond said: “The financial crisis revealed that banks need to revisit the basis on which they operate, and how they add value to society.
“We know that a small minority have let us down. We also know that we need to rebuild bonds of trust with the society we serve.”
Earlier, Mr Agius had stated – as he resigned as chairman of the crisis-hit bank – that the scandal involving price-fixing of key interbank lending rates had dealt “a devastating blow” to Barclays.
Barclays said it would launch an audit of its business practices following revelations last week that the bank had deliberately submitted low bids to the panel that sets the London interbank offered rate, or Libor, to flatter its financial position.
Mr Agius said: “As chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside.” He will stay on as chairman until his replacement is found.
About 20 institutions are under investigation by regulators on three continents in connection with interbank lending rates, including HSBC, Royal Bank of Canada and Royal Bank of Scotland.
Mr Agius’s decision is likely to be seen as a move to take some of the pressure off Mr Diamond, who has resisted calls to step down. – (Copyright The Financial Times Limited 2012)