There were 14 bad people at Barclays, but I wasn't one of them, says Bob Diamond

Former boss tells MPs that regulators ignored bank's warnings over widespread rate-fixing suspicions

Britain's financial regulator was warned that banks were blatantly fixing interest rates in the run-up to the financial crisis but did nothing stop it, the former head of Barclays claimed yesterday.

Bob Diamond told Parliament that Barclays had raised the issue of banks "under-reporting" the true amount they were having to pay to borrow money but were ignored. Asked if regulators "were asleep at the wheel", he said: "There was an issue out there. [It] should have been dealt with". Asked how bodies like the Financial Services Authority (FSA) had responded to the allegations, he replied: "Various levels of acknowledgement but no action."

During his testimony, Mr Diamond, who stepped down as Barclays chief executive on Tuesday, was repeatedly pressed by MPs over whether he had been instructed by the Deputy Governor of the Bank of England, Paul Tucker, to lower Barclays' own Libor rate of borrowing in October 2008.

He insisted he did not believe that to be the case – despite writing a contemporaneous memo suggesting Mr Tucker had told him that his bank's rates "did not always need" to be "as high". "I didn't feel it was an instruction," he explained. "I took it as either a heads-up that you're high or an annoyance that you're high." He also declined to name the "senior" Whitehall officials who had expressed concern at Barclays' borrowing costs, saying he did not want to "speculate" on who they might be. Mr Tucker is expected to be asked to name those who expressed concern over Barclays when he gives evidence to the committee next Tuesday.

Mr Diamond told MPs the rate-rigging scandal needed to be seen in the light of three distinct phases. The first between 2005 and 2007, when a small number of rogue traders at Barclays "lowballed" rates for personal and professional gain; the second between 2007 and 2008 when at an institutional level a number of banks were manipulating rates to make their borrowing costs look lower; and the third at the end of 2008, during the banking bailout.

Mr Diamond claimed that at no stage was he aware that Barclays' employees were manipulating the rates until he received the final report from regulators. "When I got the results of this investigation… I got physically ill. It's reprehensible behaviour. I am sorry, I am disappointed and I am also angry. There is absolutely no excuse for the behaviour and the types of emails that were written," he said.

However, he defended the actions of the bank in co-operating fully with the investigation and suggested it might have been unfairly penalised because it was the first to settle.

"The actions we took when we found out, I think all of them were appropriate, including recognising that we would be out ahead of the pack and helping the regulators. We did not think the focus on this would be as intense in terms of potentially harming our brand and reputation," he said.

Mr Diamond repeatedly apologised for what had gone on at the bank he "loved" and the behaviour of those responsible. "The culture was absolutely opposite of anything that we wanted," he said. "We are serious in Barclays that when people don't behave they have to leave. We missed it here, we missed it with 14 people, and that's wrong."

Afterwards, committee members appeared unconvinced by his testimony. "It was quite difficult to believe that such a successful banker as this, the head of one of the big four banks in Britain, seems to be completely oblivious to the years of the illegality of fiddling Libor," said former Treasury adviser David Ruffley.

The Labour MP, John Mann, added: "He didn't give us any straight answers. He saw nothing, he heard nothing, he knew nothing, but he still managed to get these incredibly large bonuses for being the best banker in the world. If he's so good, he ought to have known what was going on in his own bank with his own staff."

The former Business minister, Pat McFadden, said Mr Diamond's evidence only strengthened the case for a judge-led inquiry. "What's been exposed here raises wider questions. There's a case for a broader inquiry."

In response to Mr Diamond's criticism, the FSA said: "Barclays raised concerns about other banks and did make comments about Barclays' own approach to submitting Libor to external entities including the FSA [in the course of routine liquidity calls]. However the comments made to the FSA did not reflect fully Barclays' conduct."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
News
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'