Bob Diamond says he loves Barclays as he clings to his job
Cahal Milmo recounts an extroardinary day on which the bank's chairman stepped down but its chief executive stayed put
Cahal Milmo is the chief reporter of The Independent and has been with the paper since 2000. He was born in London and previously worked at the Press Association news agency. He has reported on assignment at home and abroad, including Rwanda, Sudan and Burkina Faso, the phone hacking scandal and the London Olympics. In his spare time he is a keen runner and cyclist, and keeps an allotment.
Tuesday 03 July 2012
Bob Diamond came out fighting yesterday against suggestions that he should stand down from his position as chief executive of Barclays. On a day of carefully crafted statements of contrition from the highest echelons of one of Britain's biggest banks, Mr Diamond followed the departure of his chairman, Marcus Agius, with a lengthy letter to Barclays' staff explaining just how he hopes to extract the embattled institution from a mire of allegations of laxity and wrongdoing.
In an attempt to boost sagging morale, the American-born chief adopted something of a touchy-feely tone as he acknowledged that the inter-bank lending scam had "happened on my watch".
He said: "I love Barclays, and I am proud of all of you. We all know that these events are not representative of our culture, and it is my responsibility to get to the bottom of that and resolve it. Make no mistake, the actions taken in this incident were against all the principles we live by."
At 7am yesterday, in an attempt to assuage anger at the rate-fixing scandal, Mr Agius fell on his sword with the words "the buck stops with me". That announcement had been widely publicised; what was less expected was his chief executive's own 1,800-word mea culpa and pledge of love for the bank.
The pronouncements represented a change in tactics at the bank, which had been left looking out of touch with public anger at the Libor manipulation during the weekend by defying calls for its senior management to pay the price for the deception that led to Barclays being fined £290m by regulators.
Last night it was reported that the Government inquiry into the Libor scandal will be led by Martin Wheatley, managing director of the Financial Services Authority's consumer and markets business unit.
On Saturday, spin doctors at Barclays' magisterial headquarters in London's Docklands had insisted that there was no chance Mr Agius would step down. Even as they did so, Mr Agius was consulting with his wife, banking heiress Kate Rothschild, and close friends about his increasing sense that resignation was the only path open to him.
The 65-year-old's departure, confirmed after being widely predicted on yesterday's front pages, was an abrupt and inglorious end to a 40-year career. It was interpreted by many as a tactic to preserve Mr Diamond by satisfying calls for a pound of banker's flesh from among Barclays' senior officers.
In his statement, Mr Agius, the embodiment of the august and studiously courteous British banker in a dapper tailored suit, said: "Last week's events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays' reputation. As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside."
In separate interviews, Mr Agius, who was paid £750,000 a year, let slip some of his anguish at having to resign.
He said: "It is a sad day. It's not what I planned, but you can't expect to have an important job and not also take responsibility."
The Cambridge-educated financier played down any suggestion that such a statement was a sideswipe at Mr Diamond by underlining the position of the Barclays board that "he's the man to run the bank".
Mr Agius is a keen gardener and chairman of the trustees of the Royal Botanic Gardens in west London. He became Barclays chairman in 2007 after previously working for Lazard.
It may well be that some Barclays shareholders do not mourn his passing too much. Earlier this year, the chairman fell foul of anger at the bank's generous remuneration package for executives, including Mr Diamond, when 27 per cent of shareholders voted against it. At the height of the financial crisis in 2008, he was also criticised for his role in sourcing £7bn in additional capital from Middle Eastern investors when it could have been obtained more cheaply from a Treasury scheme.
The bank insisted it had gone to Qatar and Abu Dhabi to preserve its commercial freedom, which includes the right to set the pay of its most cherished human assets.
'I am sorry': extracts from Diamond's letter to staff
"This is a great bank, full of great people. We will emerge from this period as industry leaders in every sense of the word."
"We are being thorough and robust while also ensuring that we undertake due process. We are reviewing those directly responsible and those in supervisory roles. We have the full range of tools at our disposal, from clawing back compensation to asking people to leave the bank. The Board is overseeing this entire process."
"I am sorry because we let down the people whose trust we rely on - our customers and clients; our shareholders; our regulators; and the communities in which we live and work."
"Of course, given the nature of the authorities involved, the investigations were accompanied by criminal inquiries, and some of those are still under way. It is important to bear in mind that this behaviour stopped nearly three years ago."
"Let me be clear: it does not matter if this was perpetrated by one individual or a handful - it was wrong."
"I love Barclays, and I am proud of all of you. We all know that these events are not representative of our culture, and it is my responsibility to get to the bottom of that and resolve it."
"We must help our customers and clients recognise that on the majority of days, no requests were made at all. Even when made, the requests were not always accepted by the submitter, and the attempted adjustments were, on average, small - typically less than one basis point."
"We can and will restore Barclays' reputation to the levels that the institution and you deserve."
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