Barclays boss Bob Diamond resigns amid Libor scandal - BBC News BBC News Barclays boss Bob Diamond resigns amid Libor scandal 3 July 2012 Close share panel Image caption Bob Diamond's severance package has not yet been decided, Barclays says Barclays chief executive Bob Diamond has resigned a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates. BBC business editor Robert Peston said he was encouraged to go by the heads of the Bank of England and the FSA. Mr Diamond said he was stepping down because the external pressure on the bank risked "damaging the franchise". Chief operating officer Jerry del Missier has also resigned, the third top executive in two days to do so. Barclays chairman Marcus Agius, who had announced his own resignation on Monday, will now take over the running of Barclays until a new chief executive is appointed. 'Cynical greed' BBC business editor Robert Peston said the heads of the City's two main regulators had been unable to force Mr Diamond out "because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable".

It is a soap opera like no other I can remember in my 30 years of reporting on the City By Robert PestonBusiness editor FSA boss slams 'greed' at banks "However, as a regulated institution, it was impossible for Barclays' board to ignore the revealed wishes of the two most powerful regulators in the City." Earlier, Lord Turner, the chairman of the Financial Services Authority, described the outrage that has built up over the bank's actions. "The cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits - has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis," he told the Financial Services Authority's annual meeting. Committee appearance How Libor scandal developed Criminal charges: The problems Mr Diamond will still appear before MPs on the Treasury Committee on Wednesday to answer questions about the Libor affair. "I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question," Mr Diamond said in a statement.

He is expected to be questioned about a conversation he had with the deputy governor of the Bank of England, Paul Tucker, about Barclays' Libor submissions at the height of the credit crunch in 2008. Barclays' managers came to believe, after the conversation between Mr Diamond and Mr Tucker, that the Bank of England had sanctioned them to lie about what they were paying to borrow when providing data to the committees that set the Libor rate. Inquiry row Chancellor George Osborne welcomed Mr Diamond's departure and said he hoped it was the "first step towards a new culture of responsibility" in banking. "It is the right decision for the country," Mr Osborne said, saying the UK needed a strong Barclays concentrating on lending and contributing to economic recovery. Labour leader Ed Miliband said it was "necessary and right" that Bob Diamond stepped down. "But this is about much more than one individual, it's about the culture and practices of the banking industry," he said. "That's why we need a full, judge-led, independent inquiry, to get to the bottom of those practices and make recommendations for change in the future.

We've had missed opportunities before, we've got to seize this moment." Labour is critical of the government's decision to call a parliamentary inquiry, chaired by the head of the Treasury Committee, Andrew Tyrie MP, rather than a full Leveson-style inquiry, independent of politicians. Big pay-off? Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions. Libor is to banking what the Millie Dowler case was to phone hacking By Nick RobinsonPolitical editor Labour 'must see sense on banks' Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress. Mr Diamond is one of the UK's highest paid chief executives, earning £20m last year, and was described as "the unacceptable face" of banking by the then business secretary Lord Mandelson in 2010.

The details of any severance package are not yet known, but former City minister Lord Myners suggests it could add up to £20m-£30m. "I think his resignation letter is drafted with an eye to that [pay-off], because he admits no guilt on his part at all," the Labour peer told BBC News. "The shareholders of Barclays will be expecting the board to ensure that not a penny more is paid to Bob Diamond than that to which he is legally entitled," he said. US-born Mr Diamond was head of Barclays Capital, its investment bank division, when its staff were trying to manipulate the key inter-bank rates. "He maintains that he didn't know what was going on," says Robert Peston. Investigations are continuing in the UK and the US into other banks over Libor fixing, including criminal investigations by the Department of Justice. The Serious Fraud Office in the UK is looking into possible criminal prosecutions. BBC News - Timeline: Libor-fixing scandal Timeline: Libor-fixing scandal Libor, the London inter-bank lending rate, is considered to be one of the most crucial interest rates in finance. It underpins trillions of pounds worth of loans and financial contracts.

So, when Barclays was fined £290m in June last year after some of its derivatives traders were found to have attempted to rig this key rate, already weak public confidence in banks was harmed further. The scandal led to the resignation of both Barclays chief executive Bob Diamond and chairman Marcus Agius. Here are some of the key dates in the scandal: 2005 As early as 2005 there was evidence Barclays had tried to manipulate dollar Libor and Euribor (the eurozone's equivalent of Libor) rates at the request of its derivatives traders and other banks. Misconduct was widespread, involving staff in New York, London and Tokyo as well as external traders. Between January 2005 and June 2009, Barclays derivatives traders made a total of 257 requests to fix Libor and Euribor rates, according to a report by the FSA . One Barclays trader told a trader from another bank in relation to three-month dollar Libor: "duuuude... what's up with ur guys 34.5 3m fix... tell him to get it up!".

2007 At the onset of the financial crisis in September 2007 with the collapse of Northern Rock, liquidity concerns drew public scrutiny towards Libor. Barclays manipulated Libor submissions to give a healthier picture of the bank's credit quality and its ability to raise funds. A lower submission would deflect concerns it had problems borrowing cash from the markets. Barclays' Libor submissions were at the higher end of the range of contributing banks, and prompted media speculation about the true picture of the bank's risk and credit profile. Glossary in full Senior treasury managers instructed submitters to reduce Libor to avoid negative publicity, saying Barclays should not "stick its head above the parapet", according to the FSA report. From as early as 28 August, the New York Fed said it had received mass-distribution emails that suggested that Libor submissions were being set unrealistically low by the banks. On 28 November, a senior submitter at Barclays wrote in an internal email that "Libors are not reflecting the true cost of money", according to the FSA.

In December, a Barclays compliance officer contacted the UK banking lobby group British Bankers' Association (BBA) and the FSA and described "problematic actions" by other banks, saying they appeared to be understating their Libor submissions, according to US regulator the Commodity Futures Trading Commission (CFTC) . On 6 December, a Barclays compliance officer contacted the FSA, according to the FSA report, to express concern about the Libor rates being submitted by other banks, but did not inform the FSA that its own submissions were incorrect, instead saying that they were "within a reasonable range". The FSA said that the same compliance officer then told Barclays senior management that he told the FSA "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience", and that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances". In early December, the CFTC said that the Barclays employee responsible for submitting the bank's dollar Libor rates contacted it to complain that Barclays was not setting "honest" rates.

The employee emailed his supervisor about his concerns, saying: "My worry is that we (both Barclays and the contributor banle panel) are being seen to be contributing patently false rates. "We are therefore being dishonest by definition and are at risk of damaging our reputation in the market and with the regulators. Can we discuss urgently please?" On 6 December a Barclays compliance officer contacted the FSA about concerns over the levels that other banks were setting their US Libor rate. This was made after a submitter flagged to compliance his concern about mis-reporting the rate. Compliance informed the FSA that "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience". He also reported that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances, so I suggest we maintain status quo for now". In a phone call on 17 December a Barclays employee told the New York Fed that the Libor rate was being fixed at a level that was unrealistically low . 2008 On 11 April a New York Fed official queried a Barclays employee in detail as to the extent of problems with Libor reporting.

The Barclays employee explained that Barclays was underreporting its rate to avoid the stigma associated with being an outlier with respect to its Libor submissions, relative to other participating banks On 16 April, the Wall Street Journal published a report that questioned the integrity of Libor. Around this time, according to the CFTC, a senior Barclays treasury manager informed the BBA in a phone call that Barclays had not been reporting accurately. But he defended the bank, saying it was not the worst offender: "We're clean, but we're dirty-clean, rather than clean-clean." Download the reader here "No one's clean-clean," the BBA representative responded. According to the FSA, following the Wall Street Journal report, Barclays received communications from the BBA expressing concern about the accuracy of its Libor submissions. The BBA said if the media reports were true, it was unacceptable. On 17 April, a manager made comments in a call to the FSA that Barclays had been understating its Libor submissions: "We did stick our head above the parapet last year, got it shot off, and put it back down again.

So, to the extent that, um, the Libors have been understated, are we guilty of being part of the pack? You could say we are... Um, so I would, I would sort of express us maybe as not clean clean, but clean in principle." In late April officials from the New York Federal Reserve Bank - which oversees the banks in New York - met to determine what steps might be taken to address the problems with Libor, and notified other US agencies. On 6 May the New York Fed briefed senior officials from the US Treasury in detail, and thereafter sent a further report on problems with Libor . The New York Fed officials also met with BBA officials to express their concerns and establish in greater depth the flaws in the Libor-setting process. On 29 May, Barclays agreed internally to tell the media that the bank had always quoted accurate and fair Libors and had acted "in defiance of the market" rather than submitting incorrect rates, according to the FSA. In early June, Tim Geithner, who was the head of the New York Fed at the time, sent Bank of England governor Sir Mervyn King, a list of proposals to to try to tackle Libor's credibility problem .

They included the need "to eliminate the incentive to misreport" by protecting the identity of the banks that submitted the highest and lowest rates. Sir Mervyn and Mr Geithner, now US Treasury Secretary, had discussed the matter at a central bankers' gathering a few days earlier. Download the reader here Spring: The BBA prepares a review of Libor, later described by the Bank of England's deputy governor Paul Tucker as "tremendously important because of the eroding credibility of Libor" . The Bank wanted Libor to reflect actual rates, not subjective submissions. Mr Tucker rang the banks stressing the review should be carried out by senior representatives, not the junior people normally sent to sit on the BBA committee. On 10 June, the BBA published a consultation paper seeking comments about proposals to modify Libor. "The BBA proposes to explore options for avoiding the stigma whilst maintaining transparency," it said. Barclays contributed comments but avoided mentioning its own rate submissions. On 5 August, the BBA published a feedback statement on its consultation paper , and concluded that the existing process for submissions would be retained.

In September, following the collapse of Lehman Brothers, the Bank of England had a conversation with a senior Barclays official, in which the Bank raised questions about Barclays' liquidity position and its relatively high Libor submissions. Barclays reveals Bank call memo On 13 October, the UK government announces plans to pump billions of pounds of taxpayers' money into three major banks, effectively part-nationalising Royal Bank of Scotland (RBS), Lloyds TSB and HBOS. A week later, on 21 and 22 October, Paul Tucker and senior government official Sir Jeremy Heywood discussed why Libor in the UK was not falling as fast as in the US, despite government action. Sir Jeremy also asked why Barclays' borrowing costs were so high. "A lot of speculation in the market over what they are up to," he says in an email. In subsequent evidence to the Treasury Select Committee Mr Tucker later suggests there was widespread concern at this time that Barclays was "next in line" for emergency government help. He was in regular contact with Bob Diamond, emails show. On 24 October a Barclays employee tells a New York Fed official in a telephone call that the Libor rate is "absolute rubbish" .

On 29 October Paul Tucker and Bob Diamond - head of Barclays' investment bank at the time - speak on the phone. According to Mr Diamond's account of the conversation , emailed to colleagues the next day, Mr Tucker said senior Whitehall officials wanted to know why Barclays was "always at the top end of Libor pricing". According to the Barclays chief executive, Mr Tucker said the rates "did not always need to be the case that we appeared as high as we have recently". Mr Tucker later said that gave the "wrong impression" of their conversation and said he did not encourage Barclays to manipulate its Libor submissions. Following this discussion with the Bank of England, Barclays instructed Libor submitters to lower the rate to be "within the pack". On 17 November, the BBA issued a draft document about how Libor rates should be set and required banks to have their rate submission procedures audited as part of compliance. The final paper would be circulated on 16 July 2009. 2009 On 2 November the BBA circulated guidelines for all contributor banks on setting Libor rates in the same manner. Barclays made no changes to its systems to take account of the BBA guidelines.

In December Barclays started to improve its systems and controls but ignored the BBA's guidelines. Until 2009 the bank did not have a formal Chinese wall between the derivatives team and the submitters. 2010 In June, Barclays circulated an email to submitters that set out "fundamental rules" that required them, for example, to report to compliance any attempts to influence Libor submissions either externally or internally. It also prohibited communication with external traders "that could be be seen as an attempt to agree on or impact Libor levels". 2011 In late 2011, Royal Bank of Scotland sacked four people for their alleged roles in the Libor-fixing scandal. 2012 On 27 June, Barclays admitted to misconduct. The UK's FSA imposed a £59.5m penalty . The US Department of Justice and the Commodity Futures Trading Commission (CFTC) imposed fines worth £102m and £128m respectively, forcing Barclays to pay a total of around £290m. On 29 June, chief executive Bob Diamond said he would attend a Commons Treasury Select Committee and that the bank would co-operate with authorities.

However, he insisted he would not resign. The same day, Bank of England governor Sir Mervyn King called for a "cultural change", adding: "The idea that one can base the future calculation of Libor on the idea that 'my word is my Libor' is now dead." He said implementing the Vickers banking reforms was the most important first step, but ruled out a Leveson-style inquiry into the banks. On 2 July, Barclays chairman Marcus Agius resigned and also tendered his resignation as chairman of the BBA. Mr Diamond said in a letter to staff that he would "get to the bottom" of what happened. Prime Minister David Cameron announced a parliamentary review of the banking sector, to be headed by the chairman of the Treasury Select Committee, Andrew Tyrie. The review should ensure that the UK had the "toughest and most transparent rules of any major financial sector", Mr Cameron said. On 3 July, Barclays chief executive Bob Diamond resigned , saying that the external pressure on the bank risked "damaging the franchise". He was followed by Barclays chief operating officer Jerry del Missier, who resigned the same day.

On 4 July, Mr Diamond faced a three-hour grilling from MPs on the Treasury Committee over the scandal, during which he described the behaviour of those responsible as "reprehensible" and said it had made him physically ill. The Committee subsequently accused him of giving evidence that fell short of its expected standards. On 5 July, credit rating agency Moody's lowered its rating outlook on Barclays from stable to negative. On 6 July, the Serious Fraud Office launched a criminal investigation into Libor manipulation. Deputy governor of the Bank of England Paul Tucker gave evidence to the Treasury on 9 July, insisting he had not leant on Barclays to lower its submissions, nor had he been asked to do so by the government. On 16 July, Barclays chief operating officer Jerry del Missier told MPs he was instructed by Diamond to lower the bank's Libor submissions. He also told them he believed the Bank of England alone instructed Barclays to lower them. On 17 July, US Federal Reserve chairman Ben Bernanke told a Senate committee that the Libor system was "structurally flawed" said that he still did not have full confidence in the system.

Earlier, the governor of the Bank of England, Sir Mervyn King, told the Treasury Committee that UK authorities had been worried about senior management at Barclays, even before the recent Libor scandal broke. Sir Mervyn said Barclays had sailed "close to the wind" too often. On 31 July, Deutsche Bank confirmed that a "limited number" of staff were involved in the Libor rate-rigging scandal. However, it said an internal inquiry had cleared senior management of taking part. On 10 August, the FSA published its initial findings on what needs to be done to reform the Libor rate-setting system. The FSA's managing director, Martin Wheatley, said trust in Libor "needs to be repaired" and that the current system was no longer "viable". On 16 August, it was announced that seven banks including Barclays, HSBC and RBS are to face legal questioning in the US. The other banks to receive the subpoenas from the attorney generals of New York and Connecticut were Citigroup, Deutsche Bank, JPMorgan and UBS. On 18 August, the Treasury Committee published its report into the Libor rate-fixing scandal.

The MPs blamed bank bosses for "disgraceful" behavior. They demanded changes including higher fines for firms that failed to co-operate with regulators, examination of gaps in criminal law, and a much stronger governance framework at the Bank of England. The committee also criticised the evidence of former Barclays boss Bob Diamond, saying it had been "highly selective". In response, he said he had "answered every question that was put to me truthfully, candidly and based on information available to me". On 25 September, the British Bankers' Association (BBA), the organisation that sets the Libor rate, said it would accept losing the role. Its statement came ahead of the FSA's final report on how to reform Libor, due to be published on 28 September. On 28 September, the FSA confirmed that the BBA would no longer administer Libor, and would be replaced by a data provider (an organisation such as Bloomberg or Reuters) or a regulated exchange. The report also said that the Libor system was broken and suggested its complete overhaul, including criminal prosecutions for those who try to manipulate it. The regulator also suggested basing Libor calculations on actual rates being used, rather than estimates currently provided by banks.

On 11 December, the UK's Serious Fraud Office said three men had been arrested in connection with its continuing investigations into Libor. On 19 December, Swiss bank UBS is fined a total of $1.5bn (£940m) by US, UK and Swiss regulators for attempting to manipulate Libor. It agrees to pay $1.2bn in combined fines to the US Department of Justice and the Commodities Futures Trading Commission, £160m to the UK's Financial Services Authority, and 59m Swiss Francs to the Swiss Financial Market Supervisory Authority. 2013 On 10 January, the BBC's business editor, Robert Peston, discloses that RBS is in talks with UK and US regulators over the size of fines to settle the Libor investigation. He also warns that the resignation of a senior executive was possible as part of a settlement. A week later, on 17 January, the new chief of Barclays, Antony Jenkins, tells staff to sign up to a new code of conduct - or leave the firm - as part of an attempt to ensure that scandals such as Libor-fixing never happen again.

On 25 January, a judge refuses a request from 104 senior Barclays staff for anonymity during a court case. Guardian Care Homes had accused the bank of mis-selling it an interest rate hedging product linked to Libor. On 31 January, Deutsche Bank tells investors that it may face lawsuits related to the manipulation of Libor, as well as other recent scandals. Therefore, the bank said, it was setting aside 1bn euros to cover potential litigation. Amid speculation that RBS was close to a Libor settlement, on 2 February the Chancellor of the Exchequer George Osborne says that any fines imposed on the bank should be met by bankers themselves, not taxpayers. More on This Story Barclays CEO resigns | European CEO Barclays CEO resigns Tweet After days of public pressure over the Libor rate-setting scandal, Bob Diamond has resigned as CEO of Barclays bank The resignation is effective immediately. Marcus Agius, the chairman that stepped down on Monday over the same scandal, will stay on for the time being to oversee the running of the bank. “The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen,” Mr Diamond said in a statement.

“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.” The resignation, announced Monday night, came just hours after Diamond delivered a letter to staff expressing his ‘love’ for the company and promising to discipline those responsible for the rate-setting. Diamond is due to appear before MPs in Treasury select committee on Wednesday, which will be investigating the rate-setting of Libor by Barclay’s. Last week, UK and US fined Barclays a record £290m after it admitted its traders have manipulated the rates at which banks lend to each other. Previous article Bob Diamond, Barclays Chief Executive, Resigns After Libor Rate-Fixing Scandal | The Huffington Post Bob Diamond, Barclays Chief Executive, Resigns After Libor Rate-Fixing Scandal 03/07/2012 07:34 | Updated 03 July 2012 230 Barclays chief executive Bob Diamond has resigned with immediate effect, the bank said on Tuesday.

The move comes days after the bank was fined a record £290m for manipulating the Libor, the rate at which banks lend to each, and amid growing calls for Diamond to step down. In a statement on Tuesday morning he said: "No decision over that period was as hard as the one that I make now to stand down as chief executive. READ: Bob Diamond's Full Resignation Statement "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." Speaking on BBC Radio 4's Today programme on Tuesday, Chancellor George Osborne said Diamond’s resignation was “the right decision for Barclays” and the “right decision for the country”. In a statement, Labour leader Ed Miliband said that Diamond's resignation was "necessary and right," adding: "It was clear Bob Diamond was not the man to lead the change that Barclays needed. "But this is about more than one man.

This is about the culture and practices of the entire banking system which is why we need an independent, open, judge-led, public inquiry." The CEO's decision to quit follows that of Barclays chairman Marcus Agius, who stood down on Monday. The bank said he will now become the full-time chairman "pending the appointment of a new Chief Executive." The 60-year-old banker resigned after growing calls to step down over the Libor scandal Diamond faced growing questions about how much he knew about what was going on after it emerged that Barclays staff mistakenly thought they had been instructed by the Bank of England to lie in their Libor submissions. Diamond, who was once dubbed the " unacceptable face of banking " by Lord Mandelson, showed no sign of stepping down on Monday as he pledged to see an internal review into Barclays' practices through to implementation . Diamond confirmed he would still appear at the Treasury Select Committee on Wednesday , saying: "I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question.

"I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry." Of Diamond, the outgoing Agius said: "[He] has made an enormous contribution to Barclays over the last 16 years of distinguished service to the group, building Barclays Investment Bank into one of the leading global investment banks in the world. As chief executive he has led the bank superbly." As he resigned on Monday, Agius announced an internal review into the bank's "flawed" practices. Diamond, who has courted controversy for his hefty pay packages, which in 2011 alone totalled close to £18m, told employees in a letter on Monday: "I am committed to ensuring the recommendations of this review are implemented in full." The memo emerged after the Serious Fraud Office said it hoped to decide within a month on whether a criminal prosecution in relation to the rate-fixing was appropriate. But despite his attempts to rally staff, Diamond faced increasing calls from politicians, financial campaigners and former Barclays directors to follow Agius and step down.

Labour leader Ed Miliband on Monday said the resignation of Agius from Barclays was not enough, and repeated his call for Diamond to step down. He added: "I want to see criminal sanctions against those who broke the law." The Bank of England was also drawn into the affair after it emerged that staff mistakenly thought they were instructed by the central bank to lie in their rate submissions. The Financial Services Authority's report said there had been a misunderstanding arising from a conversation between Bank Deputy Governor Paul Tucker, a favourite for the Governor role, and an unidentified senior Barclays manager on 29 October 2008. Read Barclays' full statement below: Barclays today announces the resignation of Bob Diamond as Chief Executive and a Director of Barclays with immediate effect. Marcus Agius will become full-time Chairman and will lead the search for a new Chief Executive. Marcus will chair the Barclays Executive Committee pending the appointment of a new Chief Executive and he will be supported in discharging these responsibilities by Sir Michael Rake, Deputy Chairman. The search for a new Chief Executive will commence immediately and will consider both internal and external candidates. The businesses will continue to be managed by the existing leadership teams.

Bob Diamond said "I joined Barclays 16 years ago because I saw an opportunity to build a world class investment banking business. Since then, I have had the privilege of working with some of the most talented, client-focused and diligent people that I have ever come across. We built world class businesses together and added our own distinctive chapter to the long and proud history of Barclays. 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. That is how we support economic growth and the communities in which we live and work. I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question.

I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry." Commenting, Marcus Agius said, "Bob Diamond has made an enormous contribution to Barclays over the last 16 years of distinguished service to the Group, building Barclays Investment Bank into one of the leading global investment banks in the world. As Chief Executive he 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." Twitter reaction to Diamond's resignation Twitter reaction to Diamond's resignation 1 Libor scandal: Bob Diamond resigns as Barclays chief executive | Daily Mail Online Barclays board begins fight to claw back Bob Diamond's £22.9m share package as it's revealed Mervyn King 'gave him final push' Memo from Barclays implies Bank of England knew about Libor-rigging scam Bank of England governor and Financial Services Authority put pressure on bank to force the chief-executive out, it is claimed Mr Diamond to appear before Treasury Select Committee tomorrow Barclays banker Jerry del Missier ordered staff to lower the Libor rate after misunderstanding instructions from Mr Diamond Barclays chairman Marcus Agius says he has known about Libor fixing for the last TWO years Mr Agius says Mr Diamond, 60, resigned after 'something snapped' last night Mr del Missier, the chief operating officer, also resigns from bank Shareholders will attempt to claw back 13.2million shares owned by Mr Diamond - leaving him with 'just' a year's salary worth £1

.35m Barclays share price falls 0.8% today following developments to 167p MPs will vote tomorrow on plans to set up a full judge-led inquiry into the bank rate-rigging scandal Barclays CEO Bob Diamond Succumbs to Pressure, Resigns in Libor Scandal - Shadowproof Barclays CEO Bob Diamond Succumbs to Pressure, Resigns in Libor Scandal David Dayen 2012-07-03 0 0 Barclays' CEO, Bob Diamond forced to resign (photo: World Economic Forum / wikimedia) Barclays Bank CEO Bob Diamond, who initially resisted resignation over his bank’s fraudulent manipulation of the benchmark Libor inter-bank lending rate (as well as Euribor, the euro equivalent), has now resigned , a day before testifying before Parliament.

The Bank of England and the Financial Services Authority, the two top regulators in Britain, reportedly encouraged him to go. Mr Diamond said he was stepping down because the external pressure on the bank risked “damaging the franchise”. BBC business editor Robert Peston said the Barclays boss was encouraged to go by the Bank of England and the FSA. “They were unable to force him out,” our correspondent says, “because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable.” “However, as a regulated institution, it was impossible for Barclays’ board to ignore the revealed wishes of the two most powerful regulators in the City.” Let’s come up with a comparison. Think about the day before Jamie Dimon testified in front of the Senate Banking Committee. Was there one second where he felt an impulse to resign? Did anyone from the Office of the Comptroller of the Currency or the Federal Reserve, and I mean anyone from the top all the way down to the mail room, think about asking him to resign? And it’s not like the Fail Whale trades are the only sketchy activity practiced by JPMorgan Chase. In fact, we don’t have to even look to another bank for a parallel.

This investigation into Barclays got started because the US Justice Department settled with the bank for a relatively small sum, $450 million (shared with UK regulators) over manipulating the Libor. The Justice Department agreed not to prosecute the bank , because they cooperated with the investigation. They “left open the possibility of prosecuting officers or employees” of the bank, as well as the other banks involved in the scandal, which basically includes all of them. But the track record is pitiful. Getting back to Barclays and Bob Diamond for a moment, the now ex-CEO tried to blame the scandal on the regulators , who he said looked the other way at Barclays’ fixing of the Libor. The authorities found that Barclays reduced its LIBOR submissions to protect the reputation of the bank from negative speculation during periods of acute market stress. The unwarranted speculation regarding Barclays liquidity was as a result of its LIBOR submissions being high relative to those of other banks. At the time, Barclays opinion was that those other banks’ submissions were too low given market circumstances. To be clear, Barclays encountered no liquidity problems through 2007 and 2008.

The inaccurate speculation about potential liquidity problems in the two periods noted created a real and material risk that the bank and its shareholders would suffer damage. It was, as you will recall, a period of extraordinary turbulence and uncertainty. This raised questions for the bank about the integrity of the LIBOR setting process, and various individuals within Barclays raised issues externally about that, including with the British Bankers’ Association, Financial Services Authority, Bank of England and US Federal Reserve. The Bank of England did not take kindly to this , saying that Diamond “did not understand” that he had been instructed to not tamper with the Libor. Diamond maintains the charge, and claims that he will reveal “embarrassing details” about his dealings with the regulators at tomorrow’s hearings, if challenged. Incidentally, Diamond could still walk away with a severance package of between £20-£30 million, showing there are still some similarities between the US and Britain’s financial systems. But that’s based on his lack of admission of guilt, which doesn’t totally square with the “Bank of England told me it was OK” alibi. Bloomberg’s editorial board writes that “heads should roll” at other banks over the scandal. You have to put this in the proper context.

The Libor governs the borrowing rates on virtually every consumer loan made, from mortgages to student loans to credit cards, to say nothing of the $700 trillion derivatives market. Artificially rigging these rates screws pretty much everyone on the planet who uses credit. It holds the largest class action potential in global history. And Barclays, as it says in the DoJ brief, didn’t act alone. Banks were apparently fighting it out to manipulate the Libor. There are a number of scandals that “should be the scandal” to take down the financial system. Not many have the reach of this one. 0 0 Barclays Bank CEO Bob Diamond, who initially resisted resignation over his bank’s fraudulent manipulation of the benchmark Libor inter-bank lending rate (as well as Euribor, the euro equivalent), has now resigned , a day before testifying before Parliament. The Bank of England and the Financial Services Authority, the two top regulators in Britain, reportedly encouraged him to go. Mr Diamond said he was stepping down because the external pressure on the bank risked “damaging the franchise”. BBC business editor Robert Peston said the Barclays boss was encouraged to go by the Bank of England and the FSA.

“They were unable to force him out,” our correspondent says, “because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable.” “However, as a regulated institution, it was impossible for Barclays’ board to ignore the revealed wishes of the two most powerful regulators in the City.” Let’s come up with a comparison. Think about the day before Jamie Dimon testified in front of the Senate Banking Committee. Was there one second where he felt an impulse to resign? Did anyone from the Office of the Comptroller of the Currency or the Federal Reserve, and I mean anyone from the top all the way down to the mail room, think about asking him to resign? And it’s not like the Fail Whale trades are the only sketchy activity practiced by JPMorgan Chase. In fact, we don’t have to even look to another bank for a parallel. This investigation into Barclays got started because the US Justice Department settled with the bank for a relatively small sum, $450 million (shared with UK regulators) over manipulating the Libor. The Justice Department agreed not to prosecute the bank , because they cooperated with the investigation.

They “left open the possibility of prosecuting officers or employees” of the bank, as well as the other banks involved in the scandal, which basically includes all of them. But the track record is pitiful. Getting back to Barclays and Bob Diamond for a moment, the now ex-CEO tried to blame the scandal on the regulators , who he said looked the other way at Barclays’ fixing of the Libor. The authorities found that Barclays reduced its LIBOR submissions to protect the reputation of the bank from negative speculation during periods of acute market stress. The unwarranted speculation regarding Barclays liquidity was as a result of its LIBOR submissions being high relative to those of other banks. At the time, Barclays opinion was that those other banks’ submissions were too low given market circumstances. To be clear, Barclays encountered no liquidity problems through 2007 and 2008. The inaccurate speculation about potential liquidity problems in the two periods noted created a real and material risk that the bank and its shareholders would suffer damage. It was, as you will recall, a period of extraordinary turbulence and uncertainty.

This raised questions for the bank about the integrity of the LIBOR setting process, and various individuals within Barclays raised issues externally about that, including with the British Bankers’ Association, Financial Services Authority, Bank of England and US Federal Reserve. The Bank of England did not take kindly to this , saying that Diamond “did not understand” that he had been instructed to not tamper with the Libor. Diamond maintains the charge, and claims that he will reveal “embarrassing details” about his dealings with the regulators at tomorrow’s hearings, if challenged. Incidentally, Diamond could still walk away with a severance package of between £20-£30 million, showing there are still some similarities between the US and Britain’s financial systems. But that’s based on his lack of admission of guilt, which doesn’t totally square with the “Bank of England told me it was OK” alibi. Bloomberg’s editorial board writes that “heads should roll” at other banks over the scandal. You have to put this in the proper context. The Libor governs the borrowing rates on virtually every consumer loan made, from mortgages to student loans to credit cards, to say nothing of the $700 trillion derivatives market.

Artificially rigging these rates screws pretty much everyone on the planet who uses credit. It holds the largest class action potential in global history. And Barclays, as it says in the DoJ brief, didn’t act alone. Banks were apparently fighting it out to manipulate the Libor. There are a number of scandals that “should be the scandal” to take down the financial system. Not many have the reach of this one. Barclays bank CEO Diamond resigns amid scandal - CNN.com Barclays bank CEO Diamond resigns amid scandal By the CNN Wire Staff Updated 6:25 AM ET, Wed July 4, 2012 Chat with us in Facebook Messenger. Find out what's happening in the world as it unfolds. JUST WATCHED Bob Diamond bids adieu to Barclays CEO post 00:59 Story highlights Another top Barclays executive resigns hours after CEO Bob Diamond The bank was fined $450 milllon over alleged manipulation of lending rates The rate-fixing scandal took money out of the public's pocket, an analyst says Chairman Marcus Agius resigned a day earlier but will now stay on The chief executive of Barclays, one of the world's largest banks, resigned Tuesday in the wake of a scandal, the bank announced.

Bob Diamond's resignation is effective immediately, the bank said. Diamond has long been a controversial figure, and has been a vocal backer of huge bonuses for bankers. "It's about pay for performance," he told CNN earlier this year, calling bonuses "rewards for success." The bank announced the resignation of Chief Operating Officer Jerry del Missier hours after Diamond's. Chairman Marcus Agius resigned on Monday, but in the wake of Diamond's resignation, Agius returned as chief executive on Tuesday. Barclay's reputation has been hammered by a scandal involving the rates at which banks lend each other money, known as Libor. JUST WATCHED MUST WATCH Bob Diamond to appear in Parliament 03:12 That rate affects how much interest ordinary people pay on everything from credit card debt to home mortgages and student loans. Former investment banker Ralph Silva says that is why the scandal has caused such fury. "If they're manipulating Libor, what they're basically doing is taking money out of the public's pocket, because their mortgage rates change, because their interest rates change, their loans/credit cards change -- or their pension income changes," he said.

Why LIBOR scandal will change banking culture The chairman of the Financial Services Authority, Britain's banking regulator, last month blasted the "cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits." FSA chairman Adair Turner said the scandal "has caused a huge blow to the reputation of the banking industry" and "has justifiably shocked and angered people." Diamond is due to to testify about the scandal before the British parliament's Treasury Committee Wednesday. The bank was fined more than $450 million last week by British and American regulators for rate-fixing during the height of the global financial crisis, and is one of a host of banks facing lawsuits in New York over the scandal. At least seven other banks are under investigation on suspicion of rate-fixing, leading to speculation that Diamond could be the first of many executives to resign. Financial regulators in London have not named the banks, but Deutsche Bank, Royal Bank of Scotland, Credit Suisse and UBS have acknowledged that they are under investigation. Citigroup and JPMorgan Chase have also confirmed that they are under investigation. Bank of America has refused to comment on reports that its is being probed.

British Chancellor George Osborne welcomed Diamond's resignation, calling it the right decision for the bank and the country. "We need our banks to be focused on lending to the economy, not on the scandals of the past, and I hope this will be the first step towards a new culture of responsibility in British banking which is what the British people want to see," said Osborne, effectively the country's finance minister. British Prime Minister David Cameron said Monday that a full parliamentary inquiry would be held into the Libor rate-fixing scandal and standards in the banking industry, with witnesses called to give evidence under oath. The resignation of the American-born Diamond comes a day after Barclays chairman Agius announced his own resignation over the lending-rate scandal. But Agius reversed his decision Tuesday and will lead the search for a new chief executive, Barclays said. He will stay on until a new chief executive is selected and then "begin the process of stepping down," the bank said. Barclay's is the 15th largest bank in the world, according to an annual list of the world's top 1000 banks released by The Banker magazine on Monday.

It is Britain's second most profitable bank, and the 18th most profitable in the world, the trade magazine said. Diamond's total compensation package for 2011 was worth £6.3 million ($7.92 million), including salary, bonuses and share options, the bank said. The annual bonus consisted of £2.7 million in shares and was deferred over three years, the bank said. In his resignation statement, Diamond said he always aimed "to do what I believed to be in the best interests of Barclays." Barclays chairman to resign "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," Diamond said. "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. That is how we support economic growth and the communities in which we live and work.

"I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry." "Bob Diamond has made an enormous contribution to Barclays over the last 16 years of distinguished service to the Group, building Barclays Investment Bank into one of the leading global investment banks in the world," Agius said in the statement. The $450 million fine came after the bank admitted some of its trading desks purposely under-reported its interest rates as part of LIBOR (London interbank Offered Rate) -- an interest rate floor between big banks that is set in London each trading morning. Last week, Bank of England Governor Mervyn King attacked British banking culture, saying something had gone very wrong with an industry he derided for resorting to "deceitful" methods to make money.

Ex-Barclays CEO Diamond Testifies Before Parliament in Libor Scandal - Shadowproof Ex-Barclays CEO Diamond Testifies Before Parliament in Libor Scandal David Dayen 2012-07-04 0 0 Barclays' CEO, Bob Diamond, forced to resign in LIBOR scandal (Wikipedia) It’s not July 4 in Britain (almost caught ya!), and normal midweek business continues. That means a closely watched Parliamentary hearing with Bob Diamond, the former CEO of Barclays Bank who resigned after the scandal of bank employees rigging the benchmark Libor inter-bank lending rate. The Guardian liveblog is the best place to follow this right now, and it’s been fairly explosive, as Diamond accused Paul Tucker, deputy governor of the Bank of England, of essentially encouraging Barclays to manipulate the Libor rates, to make their financial situation look less dire. Tucker has gone on the offensive, requesting a hearing with the committee investigating Barclays, to tell his side of the story.

Much of this depends on interpretation: Barclays has issued a memo in which Diamond made a record of a conversation he had with Tucker during the 2008 banking crisis and which led to some confusion in the bank about whether the central bank was encouraging Barclays to cut its Libor submissions – figures supposed to represent the interest rate at which banks are willing to lend to one another […] The regulatory documents show that Diamond did not interpret that conversation with Tucker as a signal that Barclays should cut its Libor submission. But the Barclays banker Jerry del Missier apparently interpreted the memo written by Diamond as clearance to reduce the submission – which led to the bank cutting its rates. Del Missier resigned yesterday along with Diamond. In today’s hearing, Diamond called the behavior of Barclays traders “reprehensible” , and said simultaneously that the bank discovered the nature of the rigging three years ago and that he only learned the full extent of it this month. Here’s the key section on the conversation between Diamond and Tucker: Q: What did you take Tucker’s reference to Whitehall to mean? Diamond says the Whitehall reference explains why he took a note. Q: What did you take it to mean? Diamond says two days earlier Barclays received funding from the Middle East.

Whitehall meant government officials, he says. Q: Why did you say you don’t believe you received an instruction? I didn’t believe I received an instruction, he says. Q: So what was it? A nod and a wink? If people in Whitehall thought Barclays had trouble raising funds, the implications would be serious, he suggest. Another MP asked that, if bankers go to prison ( Joe Stiglitz’ suggestion ), whether this would improve the culture of banking. Diamond replied that people who violate the law should be dealt with “harshly.” But Conservative MP Andrea Leadsom did not accept that this consisted of the actions of “rogue traders.” There were incentives to rig the Libor, she said. Diamond replied, ” I understand there will be criminal prosecutions.” The time frame in question covers a period when Labour controlled the government, and you can see the Conservatives trying to pin the blame on those previous Labour figures. Meanwhile, Labour is attacking Prime Minister David Cameron for narrowing the investigation, making it a Parliamentary inquiry rather than an independent probe led by a judge, that widens the investigation into the culture and practices of the City of London, the financial center of the country.

Cameron retorted today in Question Time that the investigation will cover culture and practices, and that the Serious Fraud Office may also launch an outside investigation. There will be votes in the House of Commons on the type of inquiry, as both sides see political advantage. The British press is treating this as a full-on scandal for banking in the UK. And they were exasperated with the hearing, which they say did little to penetrate the heart of the problem. I’m glad they don’t watch hearings in the US! 0 0 It’s not July 4 in Britain (almost caught ya!), and normal midweek business continues. That means a closely watched Parliamentary hearing with Bob Diamond, the former CEO of Barclays Bank who resigned after the scandal of bank employees rigging the benchmark Libor inter-bank lending rate. The Guardian liveblog is the best place to follow this right now, and it’s been fairly explosive, as Diamond accused Paul Tucker, deputy governor of the Bank of England, of essentially encouraging Barclays to manipulate the Libor rates, to make their financial situation look less dire. Tucker has gone on the offensive, requesting a hearing with the committee investigating Barclays, to tell his side of the story.

Much of this depends on interpretation: Barclays has issued a memo in which Diamond made a record of a conversation he had with Tucker during the 2008 banking crisis and which led to some confusion in the bank about whether the central bank was encouraging Barclays to cut its Libor submissions – figures supposed to represent the interest rate at which banks are willing to lend to one another […] The regulatory documents show that Diamond did not interpret that conversation with Tucker as a signal that Barclays should cut its Libor submission. But the Barclays banker Jerry del Missier apparently interpreted the memo written by Diamond as clearance to reduce the submission – which led to the bank cutting its rates. Del Missier resigned yesterday along with Diamond. In today’s hearing, Diamond called the behavior of Barclays traders “reprehensible” , and said simultaneously that the bank discovered the nature of the rigging three years ago and that he only learned the full extent of it this month. Here’s the key section on the conversation between Diamond and Tucker: Q: What did you take Tucker’s reference to Whitehall to mean? Diamond says the Whitehall reference explains why he took a note. Q: What did you take it to mean? Diamond says two days earlier Barclays received funding from the Middle East.

Whitehall meant government officials, he says. Q: Why did you say you don’t believe you received an instruction? I didn’t believe I received an instruction, he says. Q: So what was it? A nod and a wink? If people in Whitehall thought Barclays had trouble raising funds, the implications would be serious, he suggest. Another MP asked that, if bankers go to prison ( Joe Stiglitz’ suggestion ), whether this would improve the culture of banking. Diamond replied that people who violate the law should be dealt with “harshly.” But Conservative MP Andrea Leadsom did not accept that this consisted of the actions of “rogue traders.” There were incentives to rig the Libor, she said. Diamond replied, ” I understand there will be criminal prosecutions.” The time frame in question covers a period when Labour controlled the government, and you can see the Conservatives trying to pin the blame on those previous Labour figures. Meanwhile, Labour is attacking Prime Minister David Cameron for narrowing the investigation, making it a Parliamentary inquiry rather than an independent probe led by a judge, that widens the investigation into the culture and practices of the City of London, the financial center of the country.

Cameron retorted today in Question Time that the investigation will cover culture and practices, and that the Serious Fraud Office may also launch an outside investigation. There will be votes in the House of Commons on the type of inquiry, as both sides see political advantage. The British press is treating this as a full-on scandal for banking in the UK. And they were exasperated with the hearing, which they say did little to penetrate the heart of the problem. I’m glad they don’t watch hearings in the US! Libor-gate Explained: Why Barclays’ Scandal Matters | The Fiscal Times Libor-gate Explained: Why Barclays’ Scandal Matters Search form Libor-gate Explained: Why Barclays’ Scandal Matters REUTERS/David Moir Picture of the Day The scandal surrounding Barclays PLC has already created turmoil in the British banking giant’s executive suite – but it could reach much further before it’s resolved. Barclays chairman Marcus Agius resigned on Monday, but then agreed to stay on as the company searches for a replacement for CEO Bob Diamond, who abruptly resigned under pressure the following day. Chief Operating Officer Jerry del Missier also stepped down.

Many more heads could roll if the rate-rigging scandal mushrooms, but even as it is, the investigations into Barclays and other banks manipulation of a key interest rate called Libor has wide-reaching implications for the financial sector – and for millions of businesses and consumers in the U.S. and abroad. Here, a guide to the scandal and its potential fallout. What Is Libor? The London Interbank Offered Rate, or Libor, is a key short-term interest rate that reflects the rates that banks get when they borrow from each other day-to-day. The interbank borrowing is done by financial institutions looking to make profits or cover short-term liquidity shortfalls. The British Bankers’ Association actually tracks a range of rates calculated daily for 10 major currencies and 15 borrowing periods – from overnight to 12-month loans – so 150 numbers are published every day: the overnight euro rate, the two-week Yen rate, the 3-month New Zealand dollar rate, the 12-month U.S. dollar rate, etc. How Is the Libor Rate Set? Thomson Reuters calculates and publishes the rate for the British Bankers’ Association every day just after 11 a.m. The calculation of U.S.

Dollar Libor is based on data submitted every day, except for bank holidays, from a panel of 16 major financial institutions. The banks are asked to base their submission on this question: “At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size just prior to 11 am?” Thomson Reuters throws out the top and bottom quarter of submissions and averages the remaining eight to get the published rates. That process, however, means that Libor is based on the rates banks report they could get, not actual rates on real loans. Why Does Libor Matter? Libor “is used to set interest rates on $350 trillion of dollars and euros of loans and other obligations globally,” portfolio manager Michael Lewitt of Cumberland Advisors wrote in a note to clients this week. That’s about $50,000 worth of financial instruments for every person on Earth. Libor plays a key role in global financial markets, underpinning the interest-rate derivatives traded by large institutions. And in addition to reflecting the rates that banks get from each other, Libor is also used to determine rates for some types of loans to consumers and businesses.

“Adjustable-rate mortgages, student loans, some credit cards as well as small-business loans and corporate bond offerings can all be pegged to Libor,” says Greg McBride, senior financial analyst at Bankrate.com. In the United States, though, Libor is not the primary index for most loans, McBride notes.Still, if Libor is used as a global benchmark, the rate-rigging scandal calls into question the reliability of that benchmark – an issue that had also gotten attention during the financial crisis – and could potentially affect the interest rates many consumers pay. What Did Barclays Do? Last week, Barclays settled charges that it manipulated the Libor rate, and a similar rate called Euribor, for its own benefit by submitting falsified numbers as far back as 2005. According to the Financial Services Authority, Barclays derivatives traders routinely asked for submitters to help them profit from their trades by sending in numbers that were either higher or lower than they should have been. The regulator’s report says Barclays submitted inaccurate rates “on numerous occasions” between January 2005 and July 2008 at the behest of at least 14 Barclays derivatives traders.

“Barclays could have benefitted from this misconduct to the detriment of other market participants. Where Barclays acted in concert with other banks, the risk of manipulation increased materially,” according to the FSA. At times, the Barclays traders also tried to influence the submissions of other banks, and passed along requests from their counterparts to Barclays submitters. After a Barclays submission was lower, as requested, one of those outside traders emailed their contact: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger.” Then, during the financial crisis, after media reports questioned whether Barclays’ higher submissions for Dollar Libor indicated that the bank had a liquidity problem – whether other banks were wary of lending it money – the bank began sending in lowball numbers meant to ease concerns about its cost of borrowing. “At the height of the financial crisis, Libor was viewed by the markets as a key barometer of UK banks’ financial health,” writes Lewitt. “The higher a bank’s Libor lending rate, the more fragile its financial condition was believed to be.” The artificially low submissions were done at the direction of Barclays’ senior management, according to U.S. and U.K. authorities.

In announcing the settlement with Barclays, the authorities made a point of noting the bank’s “extraordinary cooperation” with their investigation. In light of that cooperation, the Justice Department agreed not to prosecute the bank if it meets its “ongoing obligations under the agreement” for two years. How Has Barclays Been Punished? In settling the charges against Barclays, the U.K.’s Financial Services Authority (FSA) imposed a penalty of £59.5 million (about $92 million). The U.S. Commodities Futures Trading Commission ordered Barclays to pay a $200 million penalty, and the Justice Department imposed a $160 million penalty. In all, Barclays agreed to pay more than $450 million. Were Other Banks Involved? “Barclays are not alone in this,” Britain’s chancellor of the Exchequer George Osborne said in a statement released last week. “The FSA is continuing to investigate the conduct of a number of other banks in relation to Libor… The investigations concern a number of institutions both based in the UK and overseas.” Regulators in the U.K., U.S. and Asia are reportedly investigating potential rate-rigging by more than a dozen other financial giants.

Some of the banks whose names have come up in connection to the investigation include Bank of America, Citigroup, HSBC, the Royal Bank of Scotland and UBS. “There appear to be mountains of evidence that the conduct in question was intentional and widespread, both within and among major banking institutions in the UK and likely the U.S.,” Cumberland Advisors’ Lewitt wrote. In the U.S., big banks including Barclays, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, HSBC, Lloyds Banking Group, JPMorgan Chase, Royal Bank of Scotland and UBS face lawsuits over the Libor rate-fixing. Those suits could end up costing more than any penalties imposed by regulators. Who Else Could Get Caught Up in This? The scandal also threatens to tarnish financial authorities. Barclays employees had raised concerns with regulators in 2007 and 2008 that the Libor submissions from banks, including their own, might not accurately reflect the market.

And documents released by Barclays suggested that the bank may have lowered its submission figures during the financial crisis in response to an October 2008 call from Paul Tucker, the deputy governor of the Bank of England, the country’s central bank — but in his appearance before Parliament on Wednesday, former CEO Diamond said he did not interpret the call that way. Tucker has requested a hearing to offer his version of the conversation and related events. He’ll have his chance next week. In the meantime, a Bank of England spokesman said this week that, "It is nonsense to suggest that the Bank of England was aware of any impropriety in the setting of Libor." What Happens Next? Investigators will continue to probe the extent to which other banks were involved in rate-fixing. “If it was just one or two banks then the likelihood that there was any material impact on consumer or corporate borrowers was very, very slim,” says McBride.

“If it mushrooms into a situation where a multitude of financial institutions were complicit then it does far more than undermine the integrity of financial markets – you’re talking about real world dollar impact on borrowers around the globe.” In the meantime, the British Bankers’ Association, which said in a statement released last week that it was “shocked” by the report about rate-rigging, asked authorities to examine whether changes should be made to the process used for setting Libor.

Question: Who resigned as CEO of Barclay's after the LIBOR tax rate scandal?
Answer: Bob Diamond