Compliance

Diamond Tells UK Lawmakers He Only Discovered LIBOR Offences A Few Weeks Ago

Max Skjönsberg Reporter 5 July 2012

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Bob Diamond, who resigned as group chief executive of Barclays this week, revealed that he only found out about the lowering of inter-bank rates this month, as his management came under question at a panel of UK lawmakers yesterday.

Diamond is assumed to have meant last month, as the scandal about manipulation of the London Interbank Offered Rate and its Euro counterpart broke out on 27 June. The affair has rocked the reputation of the City, amid speculation that there was widespread collaboration between banks - not all of them in the UK - to rig the market. The scandal is particularly serious because many financial products, such as mortgages, are influenced by the LIBOR rate.

When quizzed by members of the House of Commons Treasury Select Committee Diamond said that he was not told about the LIBOR abuses because he was responsible for the investment bank up until 1 January 2011.

Chairman Andrew Tyrie questioned how this could happen as Diamond had conversations with Jerry del Missier, the bank's chief operating officer who has also resigned from his post, every day. "Two chief executives (referring to Diamond's predecessor John Varley) have been running Barclays and have been doing fundamentally wrong things," one committee member said.

The hearing had been much-anticipated but many commentators in the UK, both financial and political, questioned whether much progress was made during the session.

Reprehensible

Diamond reiterated his explanation put forward in a letter to Tyrie last week, calling a small group of traders' behavior "reprehensible." He said the traders were not acting on behalf of Barclays but themselves, and that it is unclear whether it benefited the bank. "Barclays had consistently been at a high end (of LIBOR or the London Interbank Offered Rate) during the financial crisis," he said.

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