Ex-Barclays chief executive hits back over Libor attacks
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Ex-Barclays chief executive hits back over Libor attacks

Former Barclays chief executive Bob Diamond today hit back strongly at claims by British lawmakers that he gave "highly selective" evidence over the Libor rate-rigging scandal.

india Updated: Aug 18, 2012 22:02 IST
Barclays,Bob Diamond,Libor rate-rigging scandal

Former Barclays chief executive Bob Diamond on Saturday hit back strongly at claims by British lawmakers that he gave "highly selective" evidence over the Libor rate-rigging scandal.

The cross-party Treasury Select Committee issued a report on Saturday in which lawmakers accused US national Diamond of holding back information while it grilled him last month over the Libor affair.

The committee also said British regulators had shown serious shortcomings in their failure to stop Barclays manipulating the key Libor interest rate, and said the Bank of England was naive to think banks would not behave dishonestly.

Unhappy with the criticism against him, Diamond said in a statement, "I strongly challenge certain assertions about my testimony."

"I answered every question that was put to me to me truthfully, candidly and based on information available to me. I categorically refute any suggestion to the contrary."

Diamond resigned last month over Libor along with the Barclays' chairman and chief operating officer.

Libor, or London Interbank Offered Rate, is a flagship London instrument used as an interest rate benchmark throughout the world.

The rate affects what banks, businesses and individuals pay to borrow money, while the scandal risks engulfing banks across the world.

British and US regulators fined Barclays £290 million ($453 million, 369 million euros) in June after the bank admitted that it attempted to manipulate the Libor and the related European Euribor rates between 2005 and 2009.

The fallout risks becoming much wider, however, with analysts claiming that the lender could face massive lawsuits, since mortgage rates passed onto customers were influenced by Libor rates.

Banks across the world are meanwhile being investigated to see if they too were guilty of manipulating rates.

Earlier Saturday, Andrew Tyrie, the lawmaker who chaired the Treasury select committee inquiry which produced the Libor report, said: "Mr Diamond's evidence, at times highly selective, fell well short of the standard that parliament expects, particularly from such an experienced and senior witness."

In the report, entitled "Fixing Libor: some preliminary findings," lawmakers called for "urgent improvements" in the way British banks were run and regulated.

"Public trust in banks is at an all time low," Tyrie said. "Urgent improvements, both to the way banks are run, and the way they are regulated, is needed if public and market confidence is to be restored."

These included "higher fines for firms that fail to co-operate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England," Tyrie added.

The report concluded that "there was something deeply wrong with the culture of Barclays.

"Such behaviour would only be possible if the management of the bank turned a blind eye to the culture of the trading floor," it added.

Diamond, again hitting back, said, "I take particular issue with the attacks on Barclays' culture and character.

"Barclays, one of the only major UK financial institutions that did not need a rescue from the UK government, is a tremendous institution with an over 300-year tradition of supporting economic growth and the communities in which we live and work.

"I am proud of what we accomplished over the 16 years I was employed there and our prudent management of the institution helped avoid the fates that befell other UK banks in 2009.

"The picture being presented today of what Barclays stood for under my watch could not be further from the truth."

First Published: Aug 18, 2012 21:58 IST