Barclays hits back after 'hounding out' of Bob Diamond
Bank co-operated with authorities and spent almost £100m on Libor-fix probe
Barclays last night expressed its deep frustration that it has been vilified over its role in the Libor fixing scandal despite having spent almost £100 million investigating its staff and co-operating fully with the authorities.
Scores of lawyers and specialist investigators have been poring over documents and phone calls during the three-year investigation, the company said ahead of former chief executive Bob Diamond's testimony to MPs later today.
The huge investigation was part of the reason why Barclays was praised by the authorities for its co-operation, it added.
"That co-operation has led to Barclays being the first to reach resolution of these issues," it said, adding: "It is ironic that there has been such an intense focus on Barclays alone, caused by our being first to settle in the midst of an industry-wide global investigation."
That sense of frustration was mirrored elsewhere in the City, where many investors feel aggrieved that Mr Diamond has been hounded out of office by what one described as a "witch-hunt".
Ian Gordon, banking analyst at Investec, described Mr Diamond's departure as "mob rule", saying that he had been made a scapegoat despite the fact that many banks were involved in the scandal. He added: "Barclays has not been well-served for its co-operation with the regulators. The mob got its man."
The huge cost of the Barclays' probe comes on top of the expected legal claims from investors and customers who believe they have been left out of pocket as a result of the scandal.
External legal advisers have been hired to help the company's internal investigators, who have reviewed some 22m documents, 1m audio files – likely mostly to be phone conversations – and more than 75 interviews, Barclays said.
"In total, the bank has invested nearly £100m to ensure that no stone has been left unturned," the company said in its statement.
In an attempt to come clean on the debacle, Barclays yesterday published the explosive fact that it had maintained extremely close contact with regulators regarding its Libor submissions. These included 13 with the FSA, 12 with the New York Federal Reserve and two with the Bank of England.
Barclays claims that while its investigations found serious shortcomings, they prove that it took great pains to raise its concerns about Libor rates with regulators and repeatedly "over an extended period".
The bank added that chief operating officer Jerry del Missier, who passed on the instruction to traders to massage down the interest rate submission to the Libor-setting authorities, had been investigated personally by the Financial Services Authority. The probe was closed with no enforcement action taken.
The claims that Barclays lowered its Libor submissions because of the perception of pressure from the Bank of England is separate from the scandal of traders lowering the rate in order to boost their bonuses.
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