For a bank the size and stature of Barclays to conduct itself in the manner of a bad plot from Dallas is astonishing. After a brief attempt to tough it out after fines of £290m as a result of its traders' attempts to manipulate Libor, Barclays chairman Marcus Agius resigned when the buck should have stopped with chief executive Bob Diamond and his first lieutenant, Jerry del Missier.
Mr Diamond and Mr del Missier built Barclays Capital, now Barclays Investment Bank, into a top-tier example of the breed. They also presided over a culture which allowed traders to feel they could attempt to play fast and loose with Libor.
So, finally, Messrs Diamond and del Missier did the right thing and resigned yesterday. But the circumstances remain anything but clear.
What we do know is that, having attempted to make their views plain about what Barclays needed to do at the Bank of England's press conference accompanying its financial stability report last week, Lord Turner, the chairman of the Financial Services Authority, and Sir Mervyn King, governor of the Bank of England, were ignored.
Apparently it was only after several calls from Sir Mervyn and Lord Turner that the men who should have gone in the first place agreed to walk the plank after a 48-hour timespan in which there were too many twists for a credible work of fiction.
And still the twists kept coming. Mr Agius flatly denied that Mr Diamond or Mr del Missier had acted as a result of any pressure from the regulatory authorities. As if that weren't enough, before the call, Barclays released a detailed submission before what looks set to be an explosive hearing at the Treasury Select Committee today. It is pure dynamite.
It explains that Mr del Missier concluded from the note of a conversation between Mr Diamond and Paul Tucker, deputy governor of the Bank of England, that an instruction had been passed down to Barclays to ensure its submissions for the calculation of Libor were lower than it was actually paying. That the Bank had told it to cook the books.
It isn't hard to see why given that Mr Diamond quoted Mr Tucker as saying senior figures in Whitehall and Westminster were concerned about Barclays submitting high figures for what it was having to pay to borrow. But the strange conversation between Mr Diamond and Mr Tucker about Libor could be a metaphor for a wider problem. It isn't clear the two sides are speaking in a language both understand. That situation has to be addressed.
Meanwhile, Mr Diamond will bow out at the hearing, with scant motivation to spare the Bank of England's blushes. The truth needs to come out, so MPs have to resist grandstanding. Now is not the time to beat up Bob. Now is the time for answers.
Finally Messrs Diamond and del Missier resigned but the circumstances remain anything but clear.Reuse content