Bank of England, ministers and FSA on alert ahead of explosive committee appearance
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Barclays boss Bob Diamand has quit with immediate effect following the furore over market-rigging.
Outgoing chairman Marcus Agius, who announced his resignation yesterday, will become full-time chairman and lead the search for a new chief executive.
Attention has turned to the amount the American, who earned £18million last year and is worth an estimated £105million, might receive as a severance package.
As a minimum, Diamond will walk away with 13.2million shares he has accrued over 15 years, worth £22.9million.
Diamond’s departure follows a tidal wave of criticism from politicians and industry critics who demanded that he take responsibility for Barclays’ attempts to manipulate Libor, the interest rate at the heart of the scandal.
Exit door: Bob Diamond has quit Barclays after days of pressure following revelations that Barclays traders conspired to falsify Libor submission.
The controversial bank boss is expected to make explosive revelations when he faces a grilling by MPs at the Treasury select committee tomorrow.
Mr Diamond’s departure from Barclays could free him up to fight back when he appears before MPs tomorrow. The Bank of England, regulators at the Financial Services Authority and ministers past and present could face tough questions about what they knew of Libor manipulation and when.
The resignation also heaps pressure onto the heads of other banks, many of whom also face investigations into Libor rigging.
PRESSURE ON BOARD TO CLAW BACK BOB’S SHARES
Mr Diamond, who earned £18million last year, said this morning: ‘The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen.’
The American added: ‘I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth.’
Barclays shares fell around 3 per cent following the announcement, but have since recovered and were trading up 3 per cent at 173p by mid-morning.
Mr Diamond’s exit comes after Barclays was fined £290million by UK and US regulators for manipulating the Libor, the rate at which banks lend to each other.
It is unclear if Mr Diamond will receive a payoff from Barclays as part of his departure. A Barclays spokesman said this morning that the exit terms are still the subject of discussions by the bank’s leadership.
Louise Rouse, director of engagement at shareholder campaign group FairPensions, said that allowing Mr Diamond to leave with a bumper pay deal would be the ‘ultimate reward for failure’.
She said: ‘There was outrage when RBS cited contractual reasons for allowing Fred Goodwin to leave with a huge pay-off. The changes brought in since then were supposed to stop chief executives leaving in a storm with a huge pay off.
‘If Bob Diamond pockets millions in shares that could be clawed back, you have to question whether any of the changes to remuneration from the last few years have had any effect at all.’
Chairman Marcus Agius announced his intention to resign over the affair yesterday in a move widely seen as attempting to divert attention away from Mr Diamond.
He will now stay on temporarily to lead the search for a new chief executive, Barclays said.
Mr Diamond had been defiant since the scandal over Libor broke, insisting that he would not resign. But it appears the prospect of a hostile confrontation with MPs this week made his position untenable.
In his statement today Mr Diamond said: ‘I look forward to 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.’
A Barclays spokesman added that Mr Diamond had enjoyed the full support of the board at the time of the resignation, and that the decision to leave was Mr Diamond’s alone.
Chancellor of the Exchequer George Osborne said Mr Diamond’s resignation was ‘the right decision for Barclays’ and the ‘right decision for the country’.
He denied the Goverment had sought to force the removal of Barclays chief executive, adding: ‘I was very clear that it was not the job of the Chancellor of the Exchequer or the Prime Minister or anyone else in the Government to make a decision about who ran, in effect, a private company, Barclays.’
Reports yesterday suggested Mr Diamond will give details of a conversation between a senior Barclays manager – possibly Diamond himself – and the Bank of England’s current deputy governor, Paul Tucker, from 2008.
It is alleged that, following the conversation, Barclays traders were under the impression that the Bank of England was happy for them to fix Libor. The Bank of England has denied it had any knowledge of manipulation of Libor.
DIAMOND NOT FOREVER: BOB’S STORMY REIGN AT AN END
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