[Debate] Barclays CEO Bob Diamond quits - under relentless political pressure
Riaz K Tayob
riaz.tayob at gmail.com
Tue Jul 3 11:02:48 BST 2012
[So hard to find good help these days...]
Barclays chief executive Bob Diamond resigns
Chancellor George Osborne says Diamond's exit after interest rate
scandal was 'right decision for Barclays and for country'
Jill Treanor <http://www.guardian.co.uk/profile/jilltreanor>, City
* guardian.co.uk <http://www.guardian.co.uk/>, Tuesday 3 July 2012
Barclays chief executive Bob Diamond has resigned following the interest
rate manipulation scandal. Photograph: Ian Kington/AFP/Getty Images
Bob Diamond has resigned from Barclays
in the face of relentless political pressure for him to go following the
interest rate manipulation scandal.
An attempt by the board to save his position by accepting the
resignation of the chairman, Marcus Agius
on Monday has failed. Instead Agius will now become full-time chairman
and lead the search for a new chief executive.
In a stunning turnaround -- only on Monday the 60-year old chief
executive was vowing to stay
-- Diamond is to go immediately after a 15-year career with the bank and
only 18 months as chief executive.
Diamond's resignation was welcomed by the government, which has come
under increasing pressure to launch a public inquiry into the scandal.
George Osborne, speaking on BBC Radio 4's Today programme, said it was
"the right decision for Barclays
<http://www.guardian.co.uk/business/barclay> -- and for the country".
"I think Bob Diamond <http://www.guardian.co.uk/business/bob-diamond>'s
resignation is the first step towards the new age of responsibility we
need to see."
Asked whether he had played a part in Diamond's exit, the chancellor
denied it, saying he was not in his job to decide who ran Britain's banks.
Osborne also condemned the City's "corrupt practices", suggesting that
criminal cases over the bank's manipulation of the inter-bank lending
rate would follow, even though no one responsible has yet been charged
with any offence.
Ed Miliband said Diamond's departure was "necessary and right", but
repeated his call for a public inquiry.
"This is about more than one man," the Labour leader said. "This is
about the culture and practices of the entire banking system which is
why we need an independent, open, judge-led, public inquiry."
But Diamond's decision to quit -- and the return of Agius -- dismayed
some in the City.
One investor said: "We are clearly now left with the worst of all
possible situations. We don't have a ready-made candidate and a chairman
who has no credibility."
After an initial fall this morning, Barclays shares edged 1% higher to
170.5p, reflecting a view that the the worst of the political storm may
have been passed. They fell 15% last week, wiping £4bn from Barclays'
stock market value.
Diamond, 60, is understood to have decided to go on Monday evening, and
informed the board of his decision. But one source said it was a matter
of semantics as to whether Diamond went or was pushed.
There is no mention in Barclays' statement of any compensation for
Diamond, but shareholders are determined that it should be kept to a
minimum. Since Diamond's pay was first disclosed by Barclays in 2006 he
has amassed £100m in pay and perks.
The former investment banker Bill Winters, who sat on the independent
commission on banking, will be regarded as a candidate to succeed
Diamond, whose attempts to focus on the bank's commitment to
"citizenship" have speculatorly backfired.
Diamond said: "My motivation has always been to do what I believed to be
in the best interests of Barclays. No decision over that period was as
hard as the one that I make now to stand down as chief executive. The
external pressure placed on Barclays has reached a level that risks
damaging the franchise -- I cannot let that happen.
"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. I know that each and every one of the
people at Barclays works hard every day to serve our customers and clients."
Diamond will still appear before MPs on the Treasury select committee on
Wednesday where he is expected to face tough questioning about when he
knew about the bank's manipulation of the London inter-bank offered rate
Last week Barclays was ordered to pay £290m to settle claims that it
used underhand tactics to try to rig financial markets. The penalties
from UK and US regulators, including a record £59.5m fine from the
Financial Services Authority, follow allegations it manipulated Libor
and Euribor interbank lending, which govern the rates at which banks are
prepared to lend to each other in the wholesale money markets.
Agius said: "As chief executive he [Diamond] has led the bank superbly.
I look forward to working closely with the chief executives of our
businesses and the other members of the executive committee in leading
Barclays' world class businesses in serving our customers and clients
and delivering value for our shareholders."
The Lib Dem peer Lord Oakeshott said: "This is a great day. Bob Diamond
was the greedy gambler, personified. What really matters now is that the
criminals inside Barclays, that they are charged and they are convicted
and the full force of the law is brought to bear. Stealing money as a
banker is the same thing as stealing from a house."
* © 2012 Guardian News and Media Limited or its affiliated companies.
All rights reserved.
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