Head of Major British Bank Quits Amidst Shocking Scandal
FILED TO: Economics
From the HuffPost:
Barclays Chief Executive Bob Diamond resigned Tuesday, the biggest scalp in a financial markets scandal that has ripped through the bank’s senior management and sown the seeds for a new investigation into Britain’s banking sector.
Jerry del Missier, appointed only last month as chief operating officer, resigned hours after Diamond left and a day after the chairman announced he would step down. The bank released documents saying del Missier was responsible for ordering traders in 2008 to report dishonestly low borrowing rates because he had mistakenly concluded that the Bank of England had told Barclays to do so.
The Bank of England denies knowing of any impropriety in British banks’ way of setting their borrowing rates, but the question promises to dominate a testimony Diamond will make before a U.K. parliamentary committee on Wednesday.
The executives’ resignations, effective immediately, came a day after Chairman Marcus Agius fell on his sword. Agius will leave the company only after a new chairman is found and will lead the search for a new chief executive. He will take on Diamond’s responsibilities until a new CEO is appointed.
Barclays’ management has come under fire since the bank was fined $453 million last week by U.S. and British regulators for submitting false reports on interbank borrowing rates between 2005 and 2009. Much of that activity originated from traders in Barclays Capital, the investment banking division which Diamond headed at the time.
“The external pressure placed on Barclays has reached a level that risks damaging the franchise — I cannot let that happen,” Diamond said Tuesday in the statement accompanying his resignation. “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.”
Britain’s Serious Fraud Office said Monday that it would decide within a month whether to pursue criminal charges in the case. The government, which has come under pressure to initiate a judge-led inquiry into the sector, also announced a parliamentary committee to investigate what went on and report by the end of the year.