LONDON — Former Barclays chief executive Bob Diamond criticised “reprehensible” behaviour over a rate-fixing scandal in a tense appearance before British lawmakers yesterday, the day after he quit the bank.
Diamond added that while there had been “mistakes” at the lender, swift action was taken to tackle traders’ attempts to manipulate key inter-bank lending rates.
“Clearly there were mistakes, clearly there was behaviour that was reprehensible,” Diamond told the British parliament's Treasury Select Committee.
He added that he had been “physically ill” when he heard of the revelations and said: “I’m sorry, I’m disappointed and I’m also angry.”
But he also stressed that Barclays had acted quickly to tackle the problem.
“The attitude of Barclays three years ago when this was recognised was, let’s get to the bottom of it,” he said.
Diamond (60), stepped down from the top job on Tuesday over the scandal, which may implicate other international banks and trigger criminal prosecutions.
Barclays chief operating officer Jerry del Missier also resigned Tuesday over the affair, while the bank’s chairman Marcus Agius quit on Monday.
Last week, the bank was fined US$455 million by British and US regulators for the attempted rigging of the Libor and Euribor interest rates.
Libor (London Interbank Offer Rate) is a flagship London instrument used as an interest benchmark throughout the world, while Euribor is the eurozone equivalent.
The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.
Diamond told MPs he was concerned that British officials could have seen Barclays’ relatively high Libor rates as a reason to nationalise the bank at the height of the financial crisis in 2008.
Barclays had adequate funding at the time, when other banks such as the Royal Bank of Scotland were being nationalised, Diamond said.
“If Whitehall then was told Barclays was at the highest of Libor, officials might have told themselves, ‘My goodness they can’t fund, we need to nationalise them’ as they had nationalised other British banks,” Diamond said. — AFP.