Bank of England 'eased Diamond out'

Bob Diamond Mr Diamond was not found personally culpable by the FSA for Barclays' attempts to rig Libor

I have learned that Bob Diamond's departure was encouraged by the Governor of the Bank of England, Sir Mervyn King, and the chairman of the Financial Services Authority (FSA), Lord Turner.

The version of his exit, given to me by a senior Barclays source, that Mr Diamond went because of the heat from parliament, is only half the story.

What persuaded Mr Diamond and his board colleagues that he should resign was an unambiguous message to the bank from Sir Mervyn and Lord Turner that they would be happy if he resigned.

They were unable to force him out, because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable.

However, as a regulated institution, it was impossible for Barclays' board to ignore the revealed wishes of the two most powerful regulators in the City.

"This is a case of the governor getting his way by the inflexion of his eyebrows," said a source.

"It is how it used to happen and it is a good thing that it is happening again".

Update 12:10 BST

The message that the Bank of England governor wanted Bob Diamond to go was delivered personally to Barclays' chairman Marcus Agius in a telephone conversation between the two of them yesterday.

Update 13.05 BST

My disclosure that the governor of the Bank of England and chairman of FSA wanted Mr Diamond to resign, and effectively bundled him out the door, is profoundly embarrassing for Barclays' non-executive directors.

The question for them is why none of them bothered to check what the attitude would be of the City's two most powerful regulatory figures before they accepted the resignation of Marcus Agius as chairman.

To state the obvious, the impression has been created that this hugely important institution is not in charge of the basics of its destiny.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

How Labour pays for student fee cut

Labour would reduce tax relief for those earning £150,000 or more a year, shrink maximum pension pots to £1m and cut maximum annual pension contributions to £30,000 to pay for a cut to £6,000 in student fees.

Read full article

More on This Story

More from Robert


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 287.

    Yet again to re-iterate the point what stage do these people admit the in the fact that they ..politicos ..police..and bankers..and uncle tom cobly and all..are all in it up to their necks..and so are all lying SOBs..BUT WHO CAN WE ASK TO SORT IT OUT ??? all those who are supposed to protect our intrests..are in it up to their neck !!!!!!!

  • rate this

    Comment number 286.

    Pharma and Defence industries: OK. At least they're actually producing useful stuff that others (hopefully) want to buy. But Financial services are not productive in the same sense, and could be here today and gone tomorrow. It used to be that the UK had a real manufacturing sector but instead of fostering it, as others have, we ridiculed it calling it "metal-bashing". Time for a rethink.

  • rate this

    Comment number 285.

    The whole structure of banking - not just Barclays and/or investment banking - needs to change. This stuff hits the reputation of the retail bank parts as much as the trading arms, because Jo Public doesn't distinguish between the two.

    We need individual bankers, not just banks, to be registered or licensed - from CEO to Counter Cashier.

    I wonder who's next in the firing line? RBS? HSBC?

  • rate this

    Comment number 284.

    @251.Comfortably Numb
    "Don't expect fireworks tomorrow... you will be disappointed."

    But it's the Fourth of July tomorrow... Isn't that right Mr Diamond?

  • rate this

    Comment number 283.

    Dear Mr Peston
    I like your blog, you seem to have good sources and you seem to get the scoop ahead of time. You generally give a balance if somewhat sensationalist view of finance. One thing troubles me however - how do you balance the need for free speech with the need to spare the public from a minority of incorrect, unintelligent and potentially damaging comments? Cue hostilities but q is valid

  • rate this

    Comment number 282.

    This is rapidly becoming the Lie More scandal. Where the hell was the Barclays Compliance Department in all this??

  • rate this

    Comment number 281.

    If Osborne was in charge after WW2, Goering would've headed the war crimes trials!

  • rate this

    Comment number 280.

    #275 Resigned - awkward precedent if you are a banker maybe.

    Unfortunately we have been left with the court of public opinion, because of repeated failings by successive governments, regulators and banking auditors. Nothing worked so now we have the lynch mobs.

    You MUST have seen this coming. Investment bankers are a greedy bunch granted, but when did common sense become a discardable commodity?

  • rate this

    Comment number 279.

    To TruthOverFacts you refer to the defence industry which relies even more heavily on taxpayer support than the farming industry, including help to sell to customers with no credit. The Pharmaceutical industry has developed an unstable model of scattergun investment relying on sky high prices for the occasional success, the Financial services industry has many devoted to aiding money laundering.

  • rate this

    Comment number 278.

    "You have to pay what you have to pay"

    Other banks not submitting rates based on 'reality' of the true cost of borrowing. Tucker: 'Oh don't say that, that would be worse'.

    Call Tucker to the select committee and let's hear him explain his way out of that. Then get Mervyn in there to explain it and see if their lies match up.

  • rate this

    Comment number 277.

    This is just another example of the stupid system of man made games we have called Capitalism. Capitalism is actually about the creation of wealth and, the more we allow money to be creamed off the wealth creating process by these hangers on, then the more damage is done to Capitalism. Capitalism = Wealth Creation = Work

  • rate this

    Comment number 276.

    What is the truth?
    One spin says MPs did what was needed.
    The other spin says Bank of England did what was needed.
    Nice story here for an honest Journalist?

  • rate this

    Comment number 275.

    @264 Aqualung Cumbria

    your numbers are correct, my mistake.

    I fear that the "other miscreants" will face far less a public backlash than the first mover.

    Barclays are guilty, but their punishment is much more severe for being first to admit their misdemeanor. This trial by politician sets an awkward precendent

  • rate this

    Comment number 274.

    #260 sagamix - Well its hard to concentrate on ethics when people are sending links on what yacht, Bentley or 7 star hotel they are planning to splash out on come bonus time. Its distracting at the best of times.

    I remember one of my developer colleagues get offered a 70k bonus in his first year at DB, after earning 30k the year before in his previous job. I was staggered.

    I blame Clarkson!

  • rate this

    Comment number 273.


    You're exactly right. Financial services are not an "industry" at all, but merely a casino. They produce absolutely nothing except empty promises, hot air and fictitious money ... Oh yeah, and fat bonuses for the practitioners of each swindle.

  • rate this

    Comment number 272.

    Do you lot really believe the FSA is acting for truth and integrity! - It is pandering to an uninformed majority and pursueing its own agenda to 'punish' our financial services industry. No one is above the law but the sooner we realise we are in a competitive world and fairly soon when we have no Financial, Pharma or Defence industries and no income it will be 'oh god what have we done'.

  • rate this

    Comment number 271.

    Try reading the 257 e-mailed requests sent by Barclays
    derivatives guys to the LIBOR submission team !.

  • rate this

    Comment number 270.

    260. sagamix

    I wish I shared your confidence. But when a new psychological bench-mark is set... we get used to it. It becomes the norm. Acceptable.

    £200,000 a year to run a bank?... you must be joking - cheapskate!

    Time was, that was a fortune. Nowadays?... it won't even cover expenses. Mr Diamond has accumulated £100,000,000 in six years.

    Forget the PR guff - that is truly obscene!

  • rate this

    Comment number 269.

    "My view of the phone call was that Tucker was trying to tell Barclays to STOP manipulating their LIBOR submission on the HIGH SIDE"

    I struggle to see a motive here. The real issue at the time was that higher rates inferred that the bank was struggling to borrow money & was therefore exposed. The BOE & Govt were probably concerned about a potential bank run

  • rate this

    Comment number 268.

    Paul Tucker effectively told Barclays to lower its Libor rate. Did Turner at the FSA not know this before today? Diamond obviously is not going to allow King to push him around. Looks like BoE and Treasury have as much to answer for as Barclays. Tomorrow should be good.


Page 12 of 26



  • Mukesh SinghNo remorse

    Delhi bus rapist says victim shouldn't have fought back

  • Aimen DeanI spied

    The founder member of al-Qaeda who worked for MI6

  • Before and after shotsPerfect body

    Just how reliable are 'before and after' photos?

  • Woman with closed eyeStrange light show

    What do you see when you close your eyes?

  • Sony WalkmanLost ideas

    What has happened to Japan's inventors?

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.