Former Barclays Plc (BARC) chief executive officer Martin Taylor said he refused an offer from Robert Diamond, then head of Barclays Capital, to resign in 1998 over a breach of rules on the bank’s investment in Russian bonds, Taylor wrote in the Financial Times.
Barclays Capital breached bank rules limiting Russian bond investments, and when Russia defaulted on its domestic bond obligations Barclays suffered serious losses; Taylor wrote that although the breach was not made public at the time, the regulators were aware, the FT reported.
The traders involved were fired, and Diamond told Taylor he hadn’t been aware of what was going on, and offered to resign, according to the FT article.
“It was a close call,” Taylor wrote. “I suspect the subsequent history of the business would have been very different had I asked him to go. I deserve blame for being among the first to succumb to the myth of Diamond’s indispensibility, to which some in Barclays were still in thrall only a matter of days ago,” he added.