Libor scandal: Bob Diamond to receive £2m payout

 

Barclay's Chairman Marcus Agius said Mr Diamond had given up his bonus voluntarily

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.

'Abhorrent'

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".

Start Quote

Shareholders made it clear they did not want Mr Diamond to go”

End Quote Marcus Agius Executive chairman, Barclays

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".

Under pressure

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.

 

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  • rate this
    +2

    Comment number 1013.

    amazing they screw us we bail them out and he still gets a pay off... well I am sick and tried of paying my taxes to support people like him and Im struggling to survive. qscre this government

  • rate this
    +3

    Comment number 1012.

    The reform of the House of Lords is over - Cameron has pulled the plug for the time being. NO democracy in Britain. Hereditary and privilege to continue - Bankers to continue to fleece the poor. Its like the weather - no change.

  • rate this
    +2

    Comment number 1011.

    976. Rosetta
    "this current system as a whole shows that this system is designed to accumulate the life blood of the people (money) in one space, starving the rest."

    Totally off the mark. You're guessing now. Stop it, it's embarrassing.

    "Plus asking someone to explain the full complexities of this on a HYS is just condescending."

    Expecting you to know the basics isn't. You absolutely don't.

  • rate this
    -1

    Comment number 1010.

    When I resigned my teaching post a several years ago (after teaching since 1972) because my health broke down, I didn't get a pay out!
    These bankers brought Europe to its knees. When are politicans going to be couragous enough to stand up for basic morality?
    No wonder people don't bother turning out to vote. This is not Big Society but raw selfishness by a few obscenely rich men.

  • rate this
    0

    Comment number 1009.

    992.
    aphoristic
    4 Minutes ago

    Anyone for a spot of historical re-enactment? 1789 sound like a good year at the moment?
    ------

    1381 sounds like a better year to me. We need another one of THOSE years. However I know it will never happen - too much apathy and too many people entrenched in the "me, me, me" culture. It would need to be "us, us,us". The riots were as close as we'll get.

  • rate this
    -1

    Comment number 1008.

    I repeat:
    1] No one bleating in these comments has the slightest idea of how contract law works.

    2] No one bleating in these comments has the slightest idea of how the international banking system works

    3] The rich are rich because they are cleverer than the rest of us

    4] Envy is a sickness inherent in the stupid, exploited by the slightly less stupid

    5] Get an education, become rich

  • rate this
    +3

    Comment number 1007.

    "aphoristic
    Rioters = poor nobodies who did comparatively little harm... = long sentences...
    This makes me angry. VERY ANGRY. And I'm sure I'm a member of the majority on this."

    Debate that with the owners of Reeves Furniture Store, the family run 140 year old business burnt to the ground in Croydon. Or the people who fled nearby burning flats.

    See if you're in the majority around there.

  • rate this
    -1

    Comment number 1006.

    973kelboy

    "How can you compare Bob Diamond to a benefit cheat? Benefit cheats cheat money from the welfare system. Bob Diamond ran a bank?"

    Funniest post of the day

    971 In the real private sector world where I work, rather than the huffing and puffing over clauses world you live in, employers ignore employee contracts week in week out. If he weren't an insider he'd have been frogmarched out

  • rate this
    -4

    Comment number 1005.

    986. ConnorMacLeod
    928.Sixp --Where do you think the money they are paying him ultimately comes from Sherlock ?

    Not the general public (unless they are shareholders) -Barclays is a PLC so the money comes from the business...
    --
    The business gets its money from the public, surely everyone realises that! Banks create no wealth.

  • rate this
    +2

    Comment number 1004.

    964.
    TrevorL
    2 Minutes ago

    Why all this fake outrage against Bob Diamond?

    We need to keep in mind just who allowed UK regulation to become weak - Gordon Brown's goverment. I've yet to hear a proper apology for this from Ed Miliband and Ed Balls.
    Many of us would like Thatcher to apologise for destroying the country and introducing pure greed into the City. Remember who scrapped banking regs?

  • rate this
    0

    Comment number 1003.

    983.
    johnharris66

    #980 "Rioters = poor nobodies who did comparatively little harm"

    Apart from a few dead, and businesses burnt to the ground.

    _____

    Which is pretty much like the effect of our banks, really.

  • rate this
    +5

    Comment number 1002.

    980. aphoristic

    "Rioters = poor nobodies who did comparatively little harm".

    Tell that to the 5 people who were killed, or the innocent passers-by who were beaten/mugged, or the small local business that were destroyed/looted.

    I agree with your point about the bankers but the rioters were still vile criminals that deserved any punishment they got.

  • rate this
    -2

    Comment number 1001.

    Well you point out the similarities between the economic terrorism carried out by bankers on the British people and the recent arrest and start of the trial of three possible Muslim terrorists in the UK. They were out to murder EDL members here in the North, but the BBC does not care about the British people, they care about their PC agenda and seeing those that defend Britain murdered or jailed.

  • rate this
    0

    Comment number 1000.

    Mr Diamond has not been found guilty of anything, save maybe being condemned by senior politicians. We may never know what really happened and who knew what, but ultimately he resigned.
    Others who decision making and motives have been questioned have remained in office despite shouts for their resignations.
    I'm no supporter of the banks but at least he had some honour, he even rejected bonuses!

  • rate this
    -1

    Comment number 999.

    They are the devil incarnate, simple as that.

  • rate this
    +3

    Comment number 998.

    Publish the contract.

    What sort of employment contract says that if an employee RESIGNS he should get 6-12 months salary?

  • rate this
    +4

    Comment number 997.

    964 TrevorL - just keep on repeating the mantra "It's all the last Governments fault" repeat ad infinitum!
    In 1986, apart from 'Big Bang', we had the Financial Services Act and the Building Societies Act.
    Prior to those, retail banks and mutual building societies were restricted in what they could do with other peoples money.
    Now who WAS the PM again?

  • rate this
    +3

    Comment number 996.

    Only 2 million pounds... Fully expect to see Mr Diamond claiming poverty at the front of Trussle Trust queue.
    Poor poor man However will he survive.... but I bet he will always have enough spare cash for phones, fags, booze, and sky tv.

  • rate this
    -2

    Comment number 995.

    @982, the tory's saved this country in the 80s after labour bankrupted us. Remember the IMF bail out? They made the country to a surplus rather for the first time in years. Labour deregulated the banks to this level (the tory's didn't) built up a massive deficit when they should have been a surplus and created the mess we are in. The Torys are not great but Labour were shocking at times

  • rate this
    +6

    Comment number 994.

    Anyone blaming Labour or the Tories is missing the point.

    There has been a failure of regulation in the financial sector going back decades.

    Anyone using the situation to try to make political capital is actually unwittingly supporting the current status quo.

    We need politicians of all political colours to take the financial sector by the scruff of the neck & sort it out once & for all.

 

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