Compliance
Barclays CEO Speaks Out About LIBOR Misconduct
Barclays chief executive Bob Diamond has gone public about the LIBOR scandal, agreeing with the UK prime minister that the episode "raises many questions."
In a letter to the chairman of the UK's Treasury Select Committee, Diamond wrote that he is happy to answer questions to an extra convened committee.
Diamond said the principal message of the investigation carried out by UK and US authorities was that "Barclays (sic) actions did not meet the high standards we set for ourselves."
Moreover, in the letter to UK Conservative politician Andrew Tyrie, Barclays' CEO dubbed the conduct of traders to influence inter-bank interest rates for their own benefit "wholly inappropriate" and that "the control systems in place at the time were not strong enough".
Chairman Tyrie has said that the Treasury Committee will look into Barclays' malpractices relating to how the London Interbank Offered Rate and Euro LIBOR rates are set. Speaking to the Daily Telegraph, Tyrie said that the committee will ask serious questions not only to Diamond but to regulators as well.
Diamond is under pressure to resign after the UK’s Financial Services Authority earlier this week imposed its biggest ever fine - £59.5 million ($92.5 million) – on Barclays, and the sum formed part of a £290 million penalty imposed by the UK and US authorities on the bank. Shares in the bank have been hit and it is feared the scandal will also damage London’s reputation as a financial center. There have been no signs, however, of Diamond stepping down.
Besides Barclays, over 20 international banks are reportedly being investigated for similar failings, including Citi, UBS and Deutsche Bank.
On the issue of setting LIBOR rates during the financial crisis in 2007 and 2008, where the bank did not experience liquidity problems, Diamond said that the decision to lower submissions was wrong, "even taking account of the abnormal market conditions at the height of the financial crisis."
Looking forward, Diamond said that Barclays needs "to work every day to rebuild the trust that has been damaged by these actions."
