UK MPs question former Barclays executive

Bob Diamond, the former Barclays chief executive, has acknowledged that there were “mistakes” and “reprehensible” behaviour at the bank, in testimony before British politicians about the rigging of key London interest rates.

“Clearly there were mistakes, clearly there was behaviour that was reprehensible,” Diamond said on Wednesday, while insisting that Barclays had acted quickly to tackle problems as soon as the rate-fixing scandal came to light.

Financial expert Bartlett Naylor, on the banking scandal

“The attitude of Barclays three years ago when this was recognised was, let’s get to the bottom of it,” he said.

Diamond quit as chief executive of the British bank on Tuesday, the same day as the firm’s chief operating officer Jerry del Missier.

They stepped down after chairman Marcus Agius had resigned on Monday.

Libor and Euribor

Last week, the bank was fined $455m by British and US regulators for attempted rigging of the Libor and Euribor interest rates.

Libor is a flagship London instrument used throughout the world, while Euribor is the eurozone equivalent.

The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.

Manipulating the rate could have given the impression that the bank was in a stronger position financially than it actually was.

Diamond also said he was concerned that British officials could have misunderstood what he said was a situation of adequate funding for Barclays in 2008, at the height of the financial crisis, which is at the centre of the allegations.

He said this could potentially have led to the nationalisation of Barclays, as happened to other UK banks like Royal Bank of Scotland.

“If Whitehall then was told Barclays was at the highest of Libor”, officials might have told themselves, “”My goodness they can’t fund, we need to nationalise them’ as they had nationalised other British banks”, Diamond said.