News Update :

Diamond faces grilling in Parliament after Barclays exit

Saturday, July 7, 2012


UK: Bob Diamond was set to face tough questions from British lawmakers on Wednesday, the day after he quit as Barclays chief executive and a bank rate-rigging scandal claimed a third top-level scalp.

Diamond, 60, stepped down from the top job on Tuesday over revelations that Barclays traders tried to manipulate inter-bank lending rates.

Barclays chief operating officer Jerry del Missier also resigned hours later over the affair, which claimed the job of the bank's chairman Marcus Agius on Monday. Diamond was facing questions on Wednesday by parliament's Treasury Select Committee, particularly over a phone conversation he had with Paul Tucker, the deputy governor of the Bank of England (BoE), in 2008. Lawmakers are likely to focus on whether or not the BoE was implicated in the manipulation of Libor - the rate at which banks offer to lend money to each other. On Tuesday, Barclays released Diamond's note to del Missier -- then president of the firm's investment banking arm Barclays Capital -- summarising his call with Tucker.

Barclays said that from this, "del Missier concluded that an instruction had been passed down from the Bank of England not to keep Libors so high and he therefore passed down a direction to that effect."

However, the bank added that: "Bob Diamond did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier."

Agius told reporters on a conference call Tuesday that Missier had been "the most senior officer (at Barclays) who gave instructions to lower Libor rates. That obviously puts him in a very difficult position." AFP

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