Exclusive:

Exclusive: Barclays insider lifts lid on bank's toxic culture

Whistleblower: bosses ‘would have known’ what the traders were doing

A former senior Barclays employee today exposes the “culture of fear” that operated at the bank and claims Bob Diamond would have been aware of his traders' activities.

Speaking exclusively to The Independent, the banker alleges that senior executives would have known of Libor fiddling in 2008.

The Serious Fraud Office announced yesterday that it had launched a criminal inquiry into interest rate fixing amid increasing clamour for rogue bankers to be prosecuted.

Speaking on condition of anonymity, the banker says that senior Barclays bosses would have been told about Libor concerns because staff were drilled to pass anything untoward up to their managers. Failure to do this meant the sack.

"Libor fixing was escalated by several people up to their directors, they would then have escalated it up the line because at Barclays if you don't escalate, and it is found out that you haven't, it is grounds for disciplinary action. You will be dismissed."

The banker also describes the dark side of working for Mr Diamond's bank. He spoke of management by intimidation, even physical threat, punishing hours and a ruthless grading system that left workers in terror of their annual appraisals. Employees were often reduced to tears by the end of a day, but only when they had departed from the building. Such weakness would not be tolerated inside.

The SFO gave no details about who would be the subject of its investigations. It said: "The SFO director, David Green QC, has today decided formally to accept the Libor matter for investigation."

Danny Alexander, Chief Secretary to the Treasury, said he was "delighted" by the decision, which helped to strangle a muted recovery in the bank's shares over the past couple of days. Barclays finished down at 164.75p.

Investigations into other banks are continuing on both sides of the Atlantic. Misreporting of Libor figures is thought to have been common practice in the run-up to the financial crisis. Mr Diamond has claimed the scandal engulfing Barclays could put other banks off alerting regulators about such issues in future. He has argued that Barclays has been punished for being a "first mover".

Mr Diamond has always denied prior knowledge of Libor fixing and told MPs on Wednesday he was only made aware of it last month.

Connections between Mr Diamond and Barclays are understood to have been severed. "He's history," said a source. The scandal led to heated exchanges in the Commons between the Chancellor, George Osborne, and shadow Chancellor, Ed Balls. A parliamentary inquiry into the affair, as opposed to a judge-led public enquiry advocated by Labour, was agreed on Thursday.

Lord Ashcroft, a Tory peer, raised the temperature ahead of Monday's appearance before MPs of Paul Tucker, deputy governor of the Bank England. A note of a conversation between Mr Tucker and Mr Diamond, published by Barclays last week, appeared to suggest that senior government officials were endorsing Libor fixing.

Writing on the Conservative Home website, Lord Ashcroft criticised the Tory approach of "trying to establish shady motives on the part of Labour for demanding one type of inquiry rather than another; speculating about the role of former Labour ministers; and wondering what sort of 'senior figures' a Bank of England official was referring to in a conversation with the Barclays chief executive four years ago". He added: "The Libor scandal happened on Labour's watch, but voters have already passed judgement on Labour's time in office."

Mr Tucker is expected to face a grilling from MPs who will want to know exactly who the officials he talked to Mr Diamond about were.

Mr Diamond said he viewed the memo as a warning that the Barclays Libor submissions, which were higher than those of other banks, were worrying government officials.

Last night, a Barclays spokesman pointed out that Rich Ricci, head of the investment banking division, conducted the investigation into the Libor issue and reported to the board. Mr Diamond could not be contacted in time for publication.

Ricci’s tears: Banker who broke down

Rich Ricci, the man with the most notorious name in banking, has feelings, too. The Barclays’ investment banking boss reportedly wept as he tried to reassure staff the bank would be able to pull through the outrage after the Libor rate-rigging scandal.

PROMOTED VIDEO
Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
tech
Sport
Andros Townsend is challenged by Vladimir Volkov
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week