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May 22, 2022
BUSINESS

Barclays CEO Bob Diamond quits amid rate scandal

Barclays Chief Executive Bob Diamond quit his job Tuesday, the latest scalp in financial markets scandal that has also seen the bank’s chairman announce his intention to resign and sown the seeds for another investigation into Britain’s banking sector, BBC informs. Diamond’s resignation, which has taken effect immediately, comes a day after Chairman Marcus Agius fell on his sword too. However, Agius will lead the search for a new chief executive and will leave the company only after a new chairman is found. Barclays’ management has come under fire since the bank was fined USD 453 million last week by US and British regulators for submitting false reports on interbank borrowing rates between 2005 and 2009. Much of that activity originated from traders in Barclays Capital, the investment banking division which Diamond headed at the time. ‘‘The external pressure placed on Barclays has reached a level that risks damaging the franchise — I cannot let that happen,’’ Diamond said Tuesday in the statement accompanying his resignation. ‘‘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.’’ Britain’s Serious Fraud Office said Monday that it would decide within a month whether to pursue criminal charges in the case. According to Wall Street Journal, the government, which has come under pressure to initiate a judge-led inquiry into the sector, also announced a parliamentary committee to investigate what went on and report by the end of the year. Barclays’ share price was up 3.5 percent at 175 pence in midmorning London trading as investors hoped some of the heat will have been taken out of the scandal. ‘‘Although Diamond’s resignation should take some of the ferocity out of the intense criticism heaped on Barclays there is little doubt that the risk of holding the stock has risen substantially in recent days,’’ said Nic Clarke, an analyst at Charles Stanley. Both Deputy Prime Minister Nick Clegg and opposition Labour Party leader Ed Miliband called for Diamond, a 60-year-old American, to stand down. The bank said Agius, 65, would become full-time chairman and would chair the executive committee until a new CEO is appointed. Some analysts had thought Diamond’s position was secure because there was no obvious successor in the wings. Barclays admitted that it had submitted lower than actual figures on its interbank borrowing during the credit crisis in 2007 and 2008. Several other global banks are being investigated in other countries for similar actions.

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