Just days after the resignation of Chairman Marcus Agius, Barclays PLC (NYSE:BCS) (LON:BARC), one of Britain’s leading investment and retail banks suffered another blow when its chief executive Bob Diamond resigned effective immediately Tuesday, owing to the same reason of inter-bank rate-fixing scandal under investigation by U.S. and UK financial authorities.
Barclays along with 20 major British and North American banks has been alleged of manipulating LIBOR, a benchmark rate for the inter-bank borrowing. The leading investment bank has already admitted it has attempted to manipulate the setting of London Interbank Offered Rate (Libor).
The U.S. Federal Reserve is treading carefully with raising rates amid the widespread economic, macro and geopolitical uncertainties sweeping around the world. The Fed raised its target level as high as 20% in the early 1980s to deal with runaway inflation, but we're a far cry from that today — a time when inflation threatens Read More
Barclays has already been fined for misconduct by a record penalty fixed by the US Commodity Futures Trading Commission, the US Department of Justice Fraud Section and the British Financial Services Authority. And the bank could face criminal investigation from Britain’s Serious Fraud Office after the reports revealed its involvement in the scandal.
The American-born Diamond had been with the bank as the head of investment branch during the crucial years before being appointed CEO in 2011. Blaming external pressure for his resignation, he said in his statement “the external pressure has reached a level that risks damaging the franchise – I cannot let that happen.”
On Wednesday, Diamond will face a parliamentary committee panel of enquiry, to which he said “fulfilling my obligation to contribute to the Treasury Committee’s enquiries related to the settlements that Barclays announced last week, without my leadership in question.”
British Chancellor George Osborne welcomed Diamond’s decision telling the BBC Monday that it was “the right decision for Barclays and the right decision for the country….I hope this is the first step towards a new culture of responsibility in British banking.”
Even before this scandal Mr. Diamond has been in news over the disputed claims that he had been paid nearly £63m. And again early this year over his remuneration package worth £17.7m which was not supported by as much as one third of the shareholders. The 60-year-old is estimated to have a personal wealth of £105m.
Mr. Diamond began his career as a lecturer teaching a business course to students at the University of Connecticut, then has worked with biggies like Morgan Stanley and Credit Suisse First Boston before joining struggling investment banking business of Barclays in 1996. Mr. Diamond is married and has three children and is a huge fan of Chelsea FC and the Boston Red Sox baseball team.
According to a report in the Guardian, further high profile resignations are expected to follow Diamond’s.