Former Barclays PLC (LON:BARC) (NYSE:BCS) chief executive, Robert Diamond, has once again hit the headlines. Documents released on Wednesday by the British parliament, reveal that the authorities had early concerns about Diamond’s ability to run the bank.
In as much as regulators approved Diamond’s appointment to Barclays, an email recovered from 2010 suggests that there was some hesitation. The email details a discussion between Marcus Agius, outgoing Barclays PLC (LON:BARC) (NYSE:BCS) chairperson, and the chief executive of Britain’s Financial Services Authorities, Hector Sants. Throughout the email, the authorities’ lack of confidence in Diamond to run Barclays is profound.
According to the email, FSA chief executive Sants had clearly warned Barclay’s Chairman of their total lack of confidence in Diamond. The email clearly pinpointed Diamond’s flaws to be his inability to willingly air issues with the FSA, his lack of transparency, and his questionable level of openness. The email also highlighted the kind of relationship that Diamond had with the then Barclays PLC (LON:BARC) (NYSE:BCS) CEO, John Varley. Apparently, Varley had promised to share a few helpful inside tips before handing over the torch to Diamond at the onset of 2011.
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The 2010 email also revealed that the FSA had brought Diamond up to speed, with regard to Barclay’s commendable progress in its risk management and control framework. According to the email, Agius reassured regulators, citing that Diamond was “fully on board with the processes in place, and will not want to risk failing in this area.”
Amid the rate manipulation scandal, regulators said that their position on Diamond’s appointment could change, underscoring their initial lack of confidence in the former Barclays chief executive.
As expected, Diamond stepped down amid pressure and implications related to the rate- manipulation scandal. Although he was not officially dismissed, he seemingly appeared to be on his final stretch. The Libor scandal had blown out of proportion, and all fingers were pointed towards him.
From the look of things, it appears as if the Libor scandal will be a recurrent story in the European financial segment. The scandal has since spilled out of Barclay’s cooking pot, affecting a host of banks in the European region.
Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) was largely affected by the scandals. It was believed that the bank’s case was worse, as compared to Barclays PLC (LON:BARC) (NYSE:BCS). Reports even indicated the bank would have to part with heftier fines, compared to Barclay’s $450 million fine.
Barclays PLC (LON:BARC) (NYSE:BCS) recently appointed a new CEO in place of the controversial Robert Diamond. Antony Jenkins, the new CEO, is expected to overhaul activities and restore credibility to the bank