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.

About an hour into the hearing, he said he was sorry and angry because of the behavior and the types of emails that were written and that he was physically sick when he found out. "This is wrong and I am not happy about it," he said. "This doesn't represent the Barclays I know and love."

Diamond also said that the influencing of LIBOR rates was an industry-wide culture. Indeed, 20 other banks, including Citi, Deutsche Bank and UBS, are reportedly under investigation for similar failings.

Before the hearing, UK prime minister David Cameron called the bank's behavior "appalling," but said he does not believe that a judicial inquiry - which the opposition Labour Party is calling for - is necessary.

Diamond resigned on Tuesday after Barclays was handed a total fine of £290 million ($452 million) by financial regulators in the US and UK for misconduct over LIBOR.

"I think it's appropriate that Bob Diamond has stepped down and I have thought so since the news broke," Mark Burgess, chief investment officer at UK fund manager Threadneedle, said at an unrelated press briefing in London yesterday.

"In terms of who is right to come in and take over, I think it should be an outsider and I don't think it should be an investment banker," Burgess said. "The one who comes in needs not be tainted by what has happened and for the sake of public confidence, it has to be somebody with a commercial or retail banking background."

Marcus Agius, who announced his intention to resign as chairman on Monday, is leading the search for a new CEO of Barclays.