Ousted Barclays CEO to defend his actions before House of Commons
OUSTED BARCLAYS chief executive Bob Diamond, forced to quit yesterday over the mounting Libor scandal, is expected to hit back at politicians today when he appears before House of Commons MPs.
Mr Diamond, who had struggled to survive the crisis, was forced to quit after losing the support of key members of the bank’s board, it is understood.
Today, he will appear before the Commons Treasury Select Committee, but he took early retaliation by releasing a contemporaneously made note of a 2008 conversation with a Bank of England executive. In it, Mr Diamond recorded how the bank’s deputy governor, Paul Tucker, had told him that “senior” Whitehall figures, presumably Labour Party ministers, wanted Barclays to lower its daily Libor quotes.
At the time, Barclays’s figures were consistently higher than the other 15 banks used to calculate the daily rate, with Barclays believing the others were deliberately underestimating their own daily borrowing costs.
Last night, former Labour chancellor of the exchequer Alistair Darling said he would be “absolutely astonished” if the Bank of England had suggested a Libor manipulation: “Equally, I can think of no circumstances . . . anyone in the department that I was responsible for, the treasury, would ever suggest wrong-doing like this.”
Indicating Mr Diamond’s mood, his daughter Nell posted an insulting tweet about the chancellor of the exchequer, George Osborne and Labour Party leader Ed Miliband, though it was quickly deleted. Mr Diamond briefed senior Barclays executives after the Tucker conversation, which led Jerry del Missier – who also quit yesterday – to instruct staff to lower Barclays’s Libor figure.
The sequence of events leading up to Mr Diamond’s resignation decision is still unclear, but it is believed he spoke with Mr Osborne on Monday night.
Privately, sources close to Mr Diamond indicated he had been told by “a senior government figure” he could not survive the crisis. However, Mr Osborne denied being the one to wield the knife, saying: “I was very clear that it was not the job of the chancellor of the exchequer or the prime minister or anyone else in the government to make a decision about who ran, in effect, a private company.”
Meanwhile, Mr Diamond’s decision was also influenced by the continuing Commons row about the shape of an inquiry into banking, which prime minister David Cameron wants carried out by MPs.
“Bob felt all his time would be spent preparing evidence, submitting testimony, thinking about the media implications, and so on. He would have no time to run or fix the bank,” the BBC reported the sources as saying.
However, his departure will do little to take him out of the headlines, given that he could be in line for either a £35 million (€43.6 million) pay-off, or face demands by Barclays to give up £20 million worth of future bonuses .
“My motivation has always been to do what I believed to be in the best interests of Barclays. No decision over that period was as hard as the one that I make now to stand down as chief executive.
“The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen,” the American banker declared.
During a briefing with journalists yesterday, Barclays chairman Marcus Agius said bank staff who pressurised others to cut the Libor quote will be punished. He said he had announced his own resignation – now reversed – to try and “lower the temperature” surrounding Barclays, but both he and Mr Diamond acknowledged that it had not worked.
Labour wanted Barclays to cut inter-bank rates, says ex-chief: page 3; Editorial comment: page 15, main paper