George Osborne says Bob Diamond resignation is 'right decision'

 

Chancellor George Osborne today welcomed the resignation of Barclays chief executive Bob Diamond, saying it was the “right decision” for the bank and for the country.

Mr Osborne said the had been informed of the decision last night by the bank's chairman, Marcus Agius.

“He said the board had come to view that that was the right decision and Mr Diamond had come to that view,” he told the BBC Radio 4 Today programme.

“But I think it is the right decision for Barclays, I think it is the right decision for the country.”

Mr Osborne added: "I think and I hope that it is the first step towards a new culture of responsibility in British banking."

The Chancellor acknowledged that the Government had had "conversations" with the bank but denied ministers were responsible for Mr Diamond falling on his sword.

"I was very clear that it was not the job of th Chancellor of the Exchequer or the Prime Minister or anyone else in the Government to make a decision about who ran, in effect, a private company, Barclays," he said.

"This is ultimately a decision for the board of Barclays. Obviously we have had conversations over the last few days with Barclays Bank. But this is, as I say, ultimately a decision for their board."

The Chancellor said British banks are “broken” but there was now an opportunity to “fix” what has gone wrong in the industry.

He added: “I think he (Mr Diamond) has clearly taken the view that Barclays has a better future without him than with him.”

Asked about chairman Marcus Agius, who announced his resignation as yesterday but today said he would lead the search to find Mr Diamond's replacement, the Chancellor said: “I don't think you want at this moment in time a leaderless Barclays.”

The Chancellor suggested Barclays was in a different position to other banks involved in the Libor scandal.

“It is public knowledge that the Royal Bank of Scotland was involved in this but the management at the Royal Bank of Scotland has completely changed since these things happened,” he said.

“I think Barclays was in a particular position in that it had the same people involved when these events happened and I think that's why there was particular pressure on the management.”

Mr Osborne said bankers involved in the manipulation of the rate "may well stand in the dock" and insisted the Government would give a new watchdog tough powers to tackle fraudulent practices.

"There is a serious fraud investigation taking place. Unfortunately the Financial Services Authority, which conducted this investigation, felt it did not have the criminal powers to undertake a criminal investigation.

"One of the things we are urgently doing now is looking at what powers to give (a new) body before it is created next year."

He added: "I think it should have these new powers and that is basically what we intend to do."

Mr Osborne insisted the Government was not dodging a full public inquiry into banking because it was afraid where it might lead, claiming Labour had more to fear.

"I think the people who would be most afraid of where any inquiry goes will be the people who were in charge at the time," he said.

"No-one more than me would like to see Ed Balls in the dock."

He added: "I think once Labour lose the vote today, as I suspect they will, I think they will see sense and join in with an inquiry which I want to command all-party support."

PA

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