Libor scandal: Bob Diamond to receive £2m payout
- 10 July 2012
- From the section Business
Ex-Barclays boss Bob Diamond will receive his salary and benefits worth in excess of £2m, but has given up bonuses worth up to £20m after resigning amid the bank Libor scandal.
Barclays executive chairman Marcus Agius, being questioned by MPs about the scandal, said Mr Diamond had given up his bonus voluntarily.
Mr Agius also resigned but agreed to stay on to find Mr Diamond's successor.
He said he "regretted deeply" what had happened and was "truly sorry".
He told the committee he had resigned because he felt "ultimately responsible for the reputation of the bank".
He said Mr Diamond had resigned because "it became clear he had lost the support of his regulators". Mr Diamond's salary was £1.35m, and he had a six-month notice period in his contract.
Mr Agius said he was summoned to a meeting with Bank of England governor Mervyn King on the evening of Monday 2 July, the day he resigned, where he was told in no uncertain terms that the regulators had lost confidence in Mr Diamond.
Mr Agius then visited Mr Diamond at his family home to relay this message. The next morning, Mr Diamond resigned.
Committee chairman Andrew Tyrie thanked Mr Agius for his "candour and directness".
"We are finding out a great deal that we should have found out last week [from Mr Diamond]," he said.
The committee pressed Mr Agius, who is a senior non-executive director on the BBC executive board, on the Financial Services Authority's (FSA) annual review of Barclays that said the bank was aggressive in its practices and misleading on bank stress tests.
They also quoted a letter from FSA chief Lord Turner saying the bank had left an impression with the regulator that "Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations".
MPs also asked if Mr Agius had passed on the FSA's "issues" with Mr Diamond when he was appointed as chief executive. Mr Agius said that he had. In his evidence to the committee last week, Mr Diamond said he had not.
Mr Agius described the actions of those who had fixed rates as "abhorrent", but said at no point were these actions revealed to the board. He said they did not reflect the wider culture at the bank.
He said Barclays had complied with the FSA's investigation, and once it became clear that some of the bank's traders had been fixing Libor submissions, it paid the £290m fine imposed by regulators and decided that four senior executives should give up their bonuses.
Only once the public's anger became clear, he said, did he decide further action, in the form of his resignation, was needed.
He added that the bank's brokers "made it clear that shareholders did not want Mr Diamond to go".
Last week, Mr Diamond told MPs he had spoken in October 2008 to Mr Tucker, who had expressed concerns about the high level of Libor - the rate at which banks lend to one another and which is the basis for millions of daily financial transactions - being submitted by Barclays.
Mr Diamond's note of the call concluded by saying Mr Tucker had stated that "it did not always need to be the case that we appeared as high [with Libor submissions] as we have recently".
Emails released by the Bank of England (BoE) also show there was regular contact between Mr Tucker and Mr Diamond, and between Mr Tucker and senior Downing Street official Sir Jeremy Heywood, during the height of the financial crisis.
Later, Barclays lowered its Libor submissions, leading to speculation that it had done so as a result of pressure from the BoE.
However, on Monday, Mr Tucker told the Treasury Committee that he did not give Barclays instructions to lower its Libor submissions in 2008.
He also said no government minister had asked him to "lean on" Barclays over its inter-bank lending rates.
Mr Diamond's account of the conversation between the two gave "the wrong impression", he added.
Mr Tucker said he was not aware of any Libor manipulation at the time, but now realised the Libor market was a "cesspit".
Barclays has been fined by financial regulators for fixing Libor, not just during the financial crisis, but also as far back as 2005, when traders manipulated rates to increase profits.