Barclays warned two years ago about Bob Diamond

By MARTIN FLANAGAN
Published on 20/09/2012 00:00

BRITAIN’S financial regulator gave warning to Barclays two years ago that recently-ousted chief executive Bob Diamond could prove unsuitable for the post, it emerged yesterday.

Newly-published letters by the House of Commons Treasury select committee reveal that the Financial Services Authority (FSA) felt its Libor rate-manipulation inquiry could eventually colour its view of the appointment of Diamond as John Varley’s successor.

There was a meeting on 15 September 2010 between FSA boss Hector Sants and Barclays’s then-chairman, Marcus Agius.

In a letter sent to Treasury committee chairman Andre Tyrie MP, on 20 August 2012, Sants writes: “The FSA was fully aware that the ongoing investigation might come to conclusions which would be relevant to Mr Diamond’s suitability.”

However, Sants writes that it would have been wrong to pre-judge the outcome when the probe was not completed. He says that at the meeting with Agius “I specifically made clear that we reserved the right to re-assess his [Diamond’s] suitability in the light of the conclusions reached by this investigation and requested he make this clear to Mr Diamond”.

Sants adds: “I made clear that our concerns about Barclays’ culture were not some generic observation but specific to Barclays, and asked that these concerns be communicated by Mr Agius to Mr Diamond. Mr Agius confirmed that he would do this.”