When did you know? And why won't you resign? Questions for Bob Diamond
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.
Monday 02 July 2012
Barclays' chief executive faces the Treasury Select Committee this week. The key issues he must face:
When did you first know about Libor fiddling and what did you about it?
There is no evidence that Bob Diamond knew about the scam but it happened under his nose and there is growing evidence that he presided over an aggressive and risk-taking culture at Barclays Capital. The bank launched an internal investigation but it took the Financial Services Authority (FSA) to get to the bottom of the scandal. While there are no grounds for accusing the Barclays of complicity, questions can be asked about whether he is fit to be in charge.
Can you guarantee that Libour fiddling did not go beyond 14 traders?
Barclays claims to have rooted out the rotten apples responsible for manipulating Libor by sacking 14 traders. But given emerging evidence that similar tactics were deployed by other finance houses to fix crucial bank rates across the world, questions remain about how far up the executive ladder knowledge of these schemes went and how many individuals have been quietly fired to keep a lid on the scandal. Mr Diamond faces questions about what happened in Barclays. Last week the FSA said that a second wave of Libor fiddling during the 2008 financial crisis resulted from "senior management's" concerns that Barclays would be perceived as struggling. How senior?
Just what did you say to the deputy governor of the Bank of England?
In the autumn of 2008 Mr Diamond had a phone conversation with Paul Tucker, the BoE's deputy governor. It emerged yesterday that two men have differing recollections of what was said. This is important because following the conversation, Barclays managers came to believe that the BoE had given them the nod to lower their submissions falsely to Libor rate fixers.
How will you restore Barclays' reputation?
After the largest regulatory fine in British banking history and a share price which has slid 42 per cent in the last three months, Barclays is in trouble. Customers and shareholders will want to know urgently how the bank's structure – already being separated into retail and investment banks – can be overhauled to ensure acceptable levels of transparency and confidence restored. And MPs will demand to know how to he plans to improve the City's tainted image.
Why won't you resign?
Mr Diamond previously defined a bank's culture as "how people behave when you think no one is watching" and laid that principle at the heart of his stewardship of Barclays. Since the answer in Barclays case would seem to be "not very well", it is hardly surprising that many, including the Labour Party, are calling for his head. He still has to convince the public and politicians that he is the right person to preside over a root-and-branch reform of what was once one of Britain's most boring but trusted banks.
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