Pressure builds on Barclays boss Bob Diamond:
Barclays chief faces calls to step down after bank fined £290m for trying to manipulate key interest rates
Pressure is mounting on the boss of Barclays, Bob Diamond, after £290m penalties were slapped on the bank for trying to manipulate the price of crucial interest rates that affect the cost of borrowing for millions of customers around the world.
As Andrew Tyrie, chairman of the Treasury select committee, pledged to call Diamond to give evidence to MPs, the Barclays chief executive was facing calls to step down.
The former chairman of Royal Bank of Scotland Sir George Mathewson told BBC Radio 4's Today programme that as Diamond was one of the highest-earning bosses there were "very high expectations of him".
He added: "If senior management knew what was going on they deserve all they are going to get."
Sir Martin Taylor, a former boss of Barclays ousted more than a decade ago, told Today the Barclays board faced questions about restoring the bank's reputation. "Someone at senior level would have known … Really it's a matter for the board to decide … whether he [Diamond] can be the person to turn the page on this."
"He is a great leader," Taylor added. "If he can help clean out the stables … only the board can decide that."
Politicians have rounded on the bank. Tyrie described Barclays' activities as "inexcusable", while the shadow Treasury minister, Chris Leslie, asked whether there should be a criminal investigation.
Lord Myners, a former City minister under Labour, told Newsnight: "This behaviour will only change if people face the prospect of criminal charges."
The Liberal Democrat peer Lord Oakeshott said Diamond should quit: "This does terrible damage to Barclays' own reputation, the integrity of the City of London and many people's waning trust in capitalism and free markets …
"He's got to go and Barclays must be broken up – it's far too dangerous in these dangerous times."
Diamond and the Barclays chairman, Marcus Agius, spent Wednesday talking to shareholders – some of whom had already been concerned about the board following the row over Diamond's £17m pay package last year.
Diamond – who has taken home nearly £100m since 2006 – was under fire after the Financial Services Authority fined the bank £59.5m, the largest penalty ever levied by the City regulator, forcing him and other top executives to forgo any bonuses for 2012.
The FSA, and authorities in the US who hit Barclays with penalties of £230m, described repeated breaches of rules dating back to 2005. They involved "a significant number of employees", including senior managers, and called into question the integrity of the markets.
The regulators described how senior management knew about the activities of traders and "submitters" who provided crucial information to an international set of interest rates. But the FSA does not say who these managers are and has no evidence that Diamond – who ran the division at the time – knew about the actions of a number of staff.
The penalties levied on Barclays are part of an international investigation involving a number of banks – including RBS and Lloyds Banking Group – into interest rates known as the London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor). The rates play a key role in determining the cost of borrowing for households and companies.
The FSA published embarrassing email exchanges in which Barclays staff were offered bottles of Bollinger champagne in attempts to manipulate the prices of the interest rates to try to make greater profits.
The regulators, including the US department of justice and the Commodity Futures Trading Commission, said Barclays had also taken steps to fix the rates as the bank was concerned about its public image during the 2008 financial crisis.
Barclays' shares were among the biggest fallers in the FTSE 100 on Thursday morning, sliding 1.5% to 193p. HSBC, Lloyds Banking Group and Royal Bank of Scotland also saw their shares move lower.
Gary Greenwood, banks analyst at Shore Capital, said: "It appears that there is considerable media pressure for Bob Diamond to step down, although it is not clear to us whether this is an opinion that is shared by investors or whether it is a move that would create value."
Some investors had already been concerned about the structure of the bank's board and were considering asking for meetings with the senior independent director Sir Michael Rake who has held a key role in communicating with disgruntled investors even before the latest scandal.
"The ethical agenda takes another knock. They are now further on the back foot," said one investor.
Diamond and his three close colleagues – the head of investment banking, Rich Ricci; chief operating officer, Jerry del Missier, and finance director, Chris Lucas – will not get bonuses this year. But they will still be in line for multimillion pound share payouts.
So far Diamond has not given any interviews on the scandal, but said in a statement: "Nothing is more important to me than having a strong culture at Barclays. I am sorry that some people acted in a manner not consistent with our culture and values."
Pressure is mounting on the boss of Barclays, Bob Diamond, after £290m penalties were slapped on the bank for trying to manipulate the price of crucial interest rates that affect the cost of borrowing for millions of customers around the world.
As Andrew Tyrie, chairman of the Treasury select committee, pledged to call Diamond to give evidence to MPs, the Barclays chief executive was facing calls to step down.
The former chairman of Royal Bank of Scotland Sir George Mathewson told BBC Radio 4's Today programme that as Diamond was one of the highest-earning bosses there were "very high expectations of him".
He added: "If senior management knew what was going on they deserve all they are going to get."
Sir Martin Taylor, a former boss of Barclays ousted more than a decade ago, told Today the Barclays board faced questions about restoring the bank's reputation. "Someone at senior level would have known … Really it's a matter for the board to decide … whether he [Diamond] can be the person to turn the page on this."
"He is a great leader," Taylor added. "If he can help clean out the stables … only the board can decide that."
Politicians have rounded on the bank. Tyrie described Barclays' activities as "inexcusable", while the shadow Treasury minister, Chris Leslie, asked whether there should be a criminal investigation.
Lord Myners, a former City minister under Labour, told Newsnight: "This behaviour will only change if people face the prospect of criminal charges."
The Liberal Democrat peer Lord Oakeshott said Diamond should quit: "This does terrible damage to Barclays' own reputation, the integrity of the City of London and many people's waning trust in capitalism and free markets …
"He's got to go and Barclays must be broken up – it's far too dangerous in these dangerous times."
Diamond and the Barclays chairman, Marcus Agius, spent Wednesday talking to shareholders – some of whom had already been concerned about the board following the row over Diamond's £17m pay package last year.
Diamond – who has taken home nearly £100m since 2006 – was under fire after the Financial Services Authority fined the bank £59.5m, the largest penalty ever levied by the City regulator, forcing him and other top executives to forgo any bonuses for 2012.
The FSA, and authorities in the US who hit Barclays with penalties of £230m, described repeated breaches of rules dating back to 2005. They involved "a significant number of employees", including senior managers, and called into question the integrity of the markets.
The regulators described how senior management knew about the activities of traders and "submitters" who provided crucial information to an international set of interest rates. But the FSA does not say who these managers are and has no evidence that Diamond – who ran the division at the time – knew about the actions of a number of staff.
The penalties levied on Barclays are part of an international investigation involving a number of banks – including RBS and Lloyds Banking Group – into interest rates known as the London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor). The rates play a key role in determining the cost of borrowing for households and companies.
The FSA published embarrassing email exchanges in which Barclays staff were offered bottles of Bollinger champagne in attempts to manipulate the prices of the interest rates to try to make greater profits.
The regulators, including the US department of justice and the Commodity Futures Trading Commission, said Barclays had also taken steps to fix the rates as the bank was concerned about its public image during the 2008 financial crisis.
Barclays' shares were among the biggest fallers in the FTSE 100 on Thursday morning, sliding 1.5% to 193p. HSBC, Lloyds Banking Group and Royal Bank of Scotland also saw their shares move lower.
Gary Greenwood, banks analyst at Shore Capital, said: "It appears that there is considerable media pressure for Bob Diamond to step down, although it is not clear to us whether this is an opinion that is shared by investors or whether it is a move that would create value."
Some investors had already been concerned about the structure of the bank's board and were considering asking for meetings with the senior independent director Sir Michael Rake who has held a key role in communicating with disgruntled investors even before the latest scandal.
"The ethical agenda takes another knock. They are now further on the back foot," said one investor.
Diamond and his three close colleagues – the head of investment banking, Rich Ricci; chief operating officer, Jerry del Missier, and finance director, Chris Lucas – will not get bonuses this year. But they will still be in line for multimillion pound share payouts.
So far Diamond has not given any interviews on the scandal, but said in a statement: "Nothing is more important to me than having a strong culture at Barclays. I am sorry that some people acted in a manner not consistent with our culture and values."
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