Robert Diamond, who quit yesterday as chief executive officer of Barclays Plc, said a backlash that has led to the resignation of senior managers and erased $5 billion from the bank’s market value is a consequence of the lender being the first sanctioned for rigging interest rates.
“There has been an unfortunate series of events in the last week in the fact that Barclays was identified as the first bank,” Diamond, 60, said in testimony before Parliament’s Treasury Select Committee in London today. It became “clear to me” by July 2 that he had lost the support of regulators to remain CEO, Diamond said.
Barclays, the U.K.’s second-largest bank by assets, was fined a record 290 million pounds ($453.4 million) on June 27 for rigging the London interbank offered rate. Lawmakers are trying to determine what Diamond knew about disclosures last week that Barclays tried to manipulate the benchmark for profit and to mask its difficulty borrowing money during the credit crisis.
“Clearly there were mistakes,” Diamond said. “Clearly there was behavior that was reprehensible.”
Barclays has defended itself by detailing its attempts to warn regulators about competitors’ misconduct and by providing documents suggesting the U.K. government pressed it to lower its Libor submissions during the 2008 financial crisis.
The settlements with the U.K. Financial Services Authority, the U.S. Commodity Futures Trading Commission and the U.S. Justice Department resolved claims going back to 2005 that derivatives traders at London-based Barclays requested false Libor submissions to benefit swap and futures positions tied to the rate. The regulators also said that senior managers at Barclays told staff to submit artificially low rates from August 2007 until 2009.
The Barclays accord was the first in an investigation by regulators around the globe that has ensnared at least 12 banks, including Citigroup Inc., HSBC Holdings Plc, UBS AG, Credit Suisse Group AG and Royal Bank of Scotland Group Plc. In addition to Diamond, the Libor scandal has triggered the resignations of Barclays Chairman Marcus Agius, 65, and Chief Operating Officer Jerry Del Missier, 50.