Now this is interesting… for what it doesn’t say about this incredulous backflip. I’m sure it is not the way such major deception will be dealt with as we move forward through this “containment’ period, and I doubt this is the end of things. But…
For days, the CEO of Barclays Bank – the bank penalised with the world’s biggest fine for fraud – the appropriately named Bob Diamond, has been seriously resisting calls for his resignation. Yet suddenly, has finally succumbed to public, private and political calls to quit.
Meanwhile, Marcus Agius, the company’s long-standing chairman – and listed member of the Committee of 300 – who only resigned on Monday over the same fraud, has had a ‘Lazarus moment’ – and is oddly back in as the bank’s Chairman. He will now manage the search for a new CEO with ‘existing leadership teams”. What IS going on?
Bob Diamond Resigns as Barclays Chief
By Reporters from The telegraph, UK – July 3, 2012
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9371729/Bob-Diamond-resigns-as-Barclays-chief.html
Bob Diamond has resigned as chief executive of Barclays over the interest rate rigging scandal at the bank, as Marcus Agius returns as chairman.
He said in a statement: “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.”
Barclays was fined a record £290m last week for attempting to manipulate the interbank lending rate, Libor, between 2005 and 2009.
Marcus Agius, who announced his resignation on Monday in an attempt to conduct anger away from the bank and its chief, will stay on as full-time chairman and lead the search for a new chief executive.
The search for a new chief executive will commence immediately and will consider both internal and external candidates. The businesses will continue to be managed by the existing leadership teams, the bank said.
Mr Diamond had been resisting pressure to resign, insisting that he was the man to drive through changes in the bank’s culture.
Today, he said: “I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth. I know that each and every one of the people at Barclays works hard every day to serve our customers and clients. That is how we support economic growth and the communities in which we live and work.”
He said: “I looked forward to fulfilling my obligation to contribute to the Treasury Committee’s enquiries related to the settlements that Barclays announced last week without my leadership in question.”
Tomorrow he makes his first public appearance since the scandal broke after agreeing to give evidence to MPs on the Treasury select committee. It was reported last night that Mr Diamond was threatening to reveal embarrassing details of the bank’s dealings with regulators over Libor during the financial crisis.
Barclays
Barclays shares fell 3.5pc on the news but within half-an-hour of trading was up 1.8pc. Many shareholders believe that Mr Diamond, who built up the Barclays Capital, the investment banking arm, is the only one with the understanding to drive through reforms at the lender.
George Osborne said that he thought Mr Diamond’s resignation was the right decision for Barclays and the country and a “first step toward” to changing the culture of banking and a “new age of responsibility that we need to see”.
“We now have an opportunity to fix what went wrong and move on,” said Chancellor. He was told about the resignation by Mr Agius last night, who said it was the decision of the board not Mr Diamond’s.
In his resignation statement yesterday, Mr Agius, chairman for the past five years, said: “Last week’s events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays reputation. 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.”
However, he was only standing down once a replacement has been found. He will chair the Barclays Executive Committee pending the appointment of a new chief executive and he will be supported in this by Sir Michael Rake, who was appointed deputy chairman yesterday.
Robert Peston, the BBC Business Editor, said Mr Diamond was said to feel he had been “hounded out” by politicians who would have tied him up in inquiries and giving him no time to fix the bank.
The government has launched an all-party inquiry into the banking industry amidst the outcry over the rigging of Libor.
Britain’s most senior bankers will be forced to testify under oath as part of a wide-ranging industry investigation designed to help restore public trust in the country’s major lenders.
David Cameron said a joint inquiry by MPs and members of the House of Lords would investigate professional standards in banking amid a public and political outcry in the wake of last week’s admission by Barclays that it had attempted to rig Libor — the interbank lending rate used as a basis for market interest rates.
The inquiry will be led by Andrew Tyrie, the chairman of the Treasury Select Committee, and is expected to publish its report by the end of the year so that its findings can be included in new financial industry legislation.
However, Mr Tyrie said the inquiry was not about “trying to work out how to reform the whole banking industry” and would only focus on discovering what the Libor scandal says “about the standards and the corporate culture of banks”.
In addition, the Chancellor launched a separate review into Libor itself and said he had asked Martin Wheatley, the head of financial conduct at the Financial Services Authority, to report back by the end of the summer.
Barclays has also set up its own internal review into Libor-rigging.
Unlike normal select committee appearances, testimony to Mr Tyrie’s inquiry will be taken under oath.
MPs have yet to decide on who they will call. However, the inquiry raises the prospect of many current and former senior bankers being called to give evidence, including former Royal Bank Scotland boss Fred Goodwin.
Tracey McDermott, acting head of enforcement at the Financial Services Authority, described the furore resulting from rate-rigging as a “watershed” moment for the banking industry. “Perhaps the reaction to the [£290m] penalty imposed on Barclays will be… the point when the industry realises that things have to change,” she said.
However, Barclays is unlikely to be the last bank to be penalised. Lloyds and Royal Bank of Scotland, along with several international lenders, are also under investigation.
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