Bob Diamond, who stepped down as chief executive officer of Barclays Plc today, aggravated U.K. regulators by taking an aggressive stance over the manipulation of interest rates, said Laurence D. Fink, head of BlackRock Inc.
“He led with a lot of emotion which obviously” angered “regulators and some other people within the U.K.,” Fink, 59, said in an interview with Erik Schatzker and Trish Regan on Bloomberg Television’s “Market Makers.” “For me it’s sad. I know Bob very well.”
Diamond, 60, stepped down as head of Britain’s second-biggest bank amid a deepening dispute about whether the Bank of England pushed the lender to submit artificially low Libor rates during the financial crisis. Barclays was hit by a record 290 million-pound ($455 million) fine last week for rigging the London interbank offered rate, the benchmark for more than $360 trillion of securities. Diamond yesterday defied pressure to quit, pledging to implement the findings of a review into how the bank sets its Libor rates.
Fink said he was “surprised” Barclays was the first to go public with its settlement because other banks were also implicated in fixing Libor. BlackRock is the second-biggest shareholder of Barclays behind Qatar Holdings LLC, the country’s sovereign wealth fund, and Diamond was on BlackRock’s board of directors until this year.
“Obviously, the allegations are quite serious now,” Fink said. “It’s important for a leader to step down if the situation gets so enormous that it breaks down the integrity of the institution.”
Diamond will leave immediately, the London-based bank said in a statement today, a day before he faces questions by British lawmakers. Chief Operating Officer Jerry Del Missier also stepped down, and Chairman Marcus Agius plans to leave once he has found a replacement for Diamond.
Barclays released a note of a 2008 call purporting to show that Paul Tucker, the U.K. central bank’s then markets director, hinted the firm could cut its Libor rates. The disclosure marks a worsening in relations between Barclays, employer of almost 150,000 people worldwide, and its regulators. Bank of England Governor Mervyn King and Financial Services Authority Chairman Adair Turner had pushed to oust Diamond, the British Broadcasting Corp. reported earlier today.
A Bank of England spokesman declined to comment on the document.
“I don’t think anybody should underestimate the seriousness of this,” Dominic Rossi, chief investment officer for equities at Fidelity Worldwide Investments, one of Barclays’s 10 biggest shareholders, according to data compiled by Bloomberg, said today during a briefing with reporters. “In all financial services you cannot get more serious than that.”
Diamond joined BlackRock’s board of directors after the New York-based firm bought the bank’s Barclays Global Investors unit in December 2009 for about $15.2 billion. The sale turned BlackRock into the world’s biggest asset manager and added passive products such as the iShares exchange-traded funds to its offerings.
Barclays took a 19.6 percent holding in BlackRock at that time. It sold its entire stake in May and Diamond stepped down from BlackRock’s board.