The beleaguered former chief executive of Barclays Plc (BCS: Quote,BARC.L), Bob Diamond, apologized for the "reprehensible" behavior of traders at the bank who fixed interest rates, but told British lawmakers that Barclays is being singled out because it was the first to settle with the regulators.
In his testimony before the British Parliament's Treasury Select Committee in London Wednesday, Diamond said he was "physically ill" when he learned of the behavior of the Barclays traders who rigged Libor rates.
"I was physically ill, we dealt with it immediately. It was reprehensible. I'm sorry, disappointed and angry. No excuse for that behavior. This was wrong and I'm not happy about it," Diamond said.
He said that just 14 traders were to blame and that they had tainted the reputation of the 140,000 Barclays employees.
In his testimony, Diamond said, "I wasn't aware of Libor manipulation in October 2008. I found out this month."
He also said in his testimony that he did not know the identity of the Whitehall sources who prompted the Bank of England's Paul Tucker to call him in 2008 expressing concern about the Barclays' high Libor figures.
Diamond said Tucker was calling him because he wanted to warn Barclays that, if "Whitehall" thought Barclays was having problem borrowing money, which Diamond claims it wasn't, the government would want to nationalize it.
According to the Barclays documents, Diamond did not believe he received an instruction from Tucker. However del Missier, then president of Barclays's investment bank, misinterpreted it as an instruction from the Bank of England not to keep Barclays's rate as high.
Tucker, now a deputy governor of the Bank of England, has not implicated in any way in the U.K. and U.S. regulatory probes.
Tucker, who is the front-runner to take over as governor of the Bank of England, on Wednesday made a request to testify to the committee about his role in the Barclays scandal.
Also, on being asked during the tesimony whether he would give up any further bonuses or payments as part of his resignation package, Diamond said it was for the bank's board to decide.
Diamond resigned as chief executive and a director of Barclays Tuesday, less than a week after the lender agreed to pay 290 million pounds to US and UK regulators to settle allegations that the company's employees tried to manipulate the inter-bank lending rate.
The settlement was part of an industry-wide investigation by authorities that several banks, including Barclays, sought to manipulate the London Interbank Offered Rate, or Libor, and the Euro Interbank Offered Rate, or Euribor.
The Libor rate-fixing scandal has also triggered the resignations of Barclays Chairman Marcus Agius and Chief Operating Officer Jerry Del Missier. Agius himself resigned Monday, before returning as full-time chairman Tuesday to help the firm find Diamond's replacement.
The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.
Libor rates are calculated for different lending periods: overnight, one week, one month, two months, six months, etc., and published daily at 11:00 by the British Bankers' Association. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to, and typically higher than, Libor.
The scandal is seen as a fresh blow to the U.K.'s troubled banking sector, following massive bailouts paid for by taxpayers in the wake of the financial crisis.
The British government has ordered an independent review into the inter-bank lending rate. British Prime Minister David Cameron has said he plans to make Diamond and top executives at Barclays accountable for the scandal, while opposition Labour leader Ed Miliband has demanded a full public inquiry into banking practices.
| || |
| To receive FREE breaking news email alerts for Barclays PLC and others in your portfolio|
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org