[Debate] Barclays CEO Bob Diamond quits - under relentless political pressure

[Riaz K Tayob]

[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
    editor
  * guardian.co.uk <http://www.guardian.co.uk/>, Tuesday 3 July 2012
    08.45 BST


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 
<http://www.guardian.co.uk/business/2012/jul/03/bob-diamond-resigns-barclays-bank> 
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 
<http://www.guardian.co.uk/business/2012/jul/02/barclays-chairman-marcus-agius-resigns>, 
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 
<http://www.guardian.co.uk/business/2012/jul/02/barclays-staff-memo-bob-diamond> 
-- 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 
(Libor).

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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