Robert E Diamond Jr, the chief executive of Barclays, resigned on Tuesday, less than a week after the British bank agreed to pay $450 million to settle accusations that it had tried to manipulate key interest rates for its own benefit.
Diamond’s resignation, which was effective immediately, comes after mounting criticism of the bank’s actions from politicians and shareholders.
Prime Minister David Cameron had called on individuals within the bank to take responsibility, while other British politicians had said Diamond should resign.
Diamond’s decision to leave was made on Monday afternoon in response to this pressure, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because the discussions were private. Diamond had wanted to avoid a protracted public spotlight focused on the bank’s past activities, the person added.
“My motivation has always been to do what I believed to be in the best interests of Barclays,” Diamond said in a statement. “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.”
Further resignations could be in the works.
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Jerry del Missier, who was promoted to Barclays’ chief operating officer last month, resigned on Tuesday with immediate effective as part of the shake-up following the rate manipulation scandal. del Missier was the co-president of Barclays Capital, the firm’s investment banking unit, between 2005 and 2008, and become co-chief executive of corporate and investment banking at Barclays in 2009.
Marcus Agius, the bank’s chairman, who resigned on Monday, will stay at the bank until a new chief executive has been found, according to a statement from Barclays. He will then step down from his post.
Until a new chief executive has been appointed, Agius will head the executive committee, and will be supported by Michael Rake, the bank’s deputy chairman.
While Diamond is stepping down, he will face continued scrutiny on Wednesday when he testifies before a British parliamentary committee.
Local politicians are expected to question him about the actions within the bank that culminated in multimillion-dollar fines from the Justice Department and the Commodity Futures Trading Commission in the United States and the Financial Services Authority in Britain.
Fresh details about the case show how Diamond and other senior executives played a role in the questionable actions and failed to prevent them, according to several people familiar with the details of the case.
Diamond’s top deputies told employees in 2007 and 2008 to report artificially low rates in line with those of rivals in an effort to deflect scrutiny about the bank’s health at the height of the financial crisis, according to the people, who spoke on condition of anonymity because they were not authorised to speak publicly.
Barclays declined to comment about the involvement of senior executives.
Diamond’s resignation comes after the settlement that Barclays reached last week with American and British authorities.
The deal is one result of a wide-ranging inquiry into how big banks set certain benchmarks, including the London interbank offered rate, or Libor.
Those rates are used to determine the costs of $350 trillion in financial products, including credit cards, mortgages and home loans. American and international regulators are still investigating several other banks, including HSBC, JPMorgan Chase and Citigroup.
In a letter to Barclays employees on Monday, Diamond said he was “disappointed and angry” about the bank’s past attempts to manipulate key interest rates.
“I am disappointed because many of these behaviors happened on my watch,” he wrote.
The leadership changes at Barclays come after Diamond helped transform the firm’s investment bank into a major player on Wall Street.
The American-born Diamond joined the British bank in the late 1990s, expanding the investment banking unit into new areas like derivatives and commodities trading.
Diamond, then the head of the investment banking unit Barclays Capital, also extended the firm’s presence in the United States in 2008 by acquiring the North American operations of Lehman Brothers at the height of the financial crisis.
Shares in Barclays rose 2.1 per cent in mid-afternoon trading in London on Tuesday.
© 2012 The New York Times News Service