As it happened: Former Barclays boss Bob Diamond at the Treasury select committee
BOB Diamond, who yesterday resigned as chief executive of Barclays over the Libor rate-rigging scandal, was giving evidence to MPs at the Commons Treasury select committee this afternoon.
The Scotsman’s politics editor Eddie Barnes was live blogging the session.
5.12pm: The session closes with Mr Diamond metaphorically on his knees and beginning to show a loss of patience with the constant barrage of aggressive questioning from MPs. Labour MP Pat Macfadden deals the last blow, reading out a section from the report by the Financial Services Authority showing how the bank fiddled its borrowing costs. “You lied to them,” points out Mr Macfadden. Mr Diamond is forced to agree.
He closes by saying he is “worried” that the decision by Barclays to “come out first” on Libor manipulation has handed the bank a complete mauling - something which, he says, will not act as a great incentive on future occasions. Andrew Tyrie finishes by acknowledging this hasn’t been an easy afternoon for the ex-Barclays chief. You can say that again.
4.38pm: John Mann has a good rant at Mr Diamond’s claim that he only found out about the rate fiddling a month ago. “You’re not even asking questions internally. Either you were complicit or you were grossly negligent or you were grossly incompetent.”
Then Mr Mann asks why Mr Diamond doesn’t donate his £20m bonus to Shelter. Mr Diamond replies that he feels he and the management team did a good job in rooting out the wrong-doing at his bank. Then Scottish MP John Thurso comes next, noting how Mr Diamond’s two and half hour long evidence session makes him look like Geoffrey Boycott.
4.25pm: Labour MP John Mann decides to pile in. He asks Mr Diamond whether he knows the founding principles of the Quakers who first set up Barclays? Mr Diamond looks at him like he’d like to put him in a mincer. “Well I can tell you and tattoo them on your knuckles,” says Mr Mann. “Honesty, integrity and plain dealing,” declares Mr Mann. Mr Diamond hits back and says that honesty, integrity and plain dealing sums up the way he did his business.
4.18pm: The Committee is impatient with Mr Diamond’s constant declarations of regret and ignorance. “You’ll forgive us for thinking there was something wrong with the culture,” says Andrew Tyrie, the committee chairman.
3.47pm: Should you forego a pay off, asks a Labour MP? “I think that is certainly a question for the board”. That looks like a no.
3.33pm: “I understand there will be criminal investigations.... We are not going to stand in the way of it,” says Diamond on the question of whether the long arm of the law might be coming in.
3.24pm: It is fair to say the MPs are a little sceptical of Mr Diamond’s ‘I didn’t know’ defence. “They’ve either been too frightened or too disinterested to tell you anything about it,” says George Mudie, Labour MP. Mr Diamond is struggling to answer here, and is barely even being given the time to answer. “I think the culture shows that as soon as it was known, it was dealt with.” He is only able to fall back onto the admission that it was all wrong.
3.13pm: Tory MP David Ruffley tries to rough up Diamond. When did he find out about the low-balling of the Libor rate? “This month”, replies Diamond. Ruffley asks: “Why on earth didn’t you know this was going on on your watch?” The ruff-ing up gets Mr Diamond’s juices going. He talks about how he felt when he read the ‘Bollinger’ emails sent by Barclays traders who were fiddling the bank’s rates.
“I got physically ill. It is reprehensible beajviour. If you’re asking me if those actions should be dealt with, absolutely....I’m sorry, I’m disappointed and I am also angry. There is no excuse for the behaviour that was exhibited. And I stand for a lot of people at Barclays that are really angry about this. I’m not happy about it.... this doesn’t represent the Barclays I know and I love.”
2.56pm: Michael Fallan MP back on track asking Diamond to firm up who these shadowy “Government sources” were who were putting the heat on the Bank of England to push down Barclays high borrowing rates. “I would only be speculating if I said who I thought they were....I don’t want to speculate....Senior people in the government,” replies Mr Diamond.
Mr Diamond comes to the defence of Paul Tucker, the deputy government at the Bank of England who was “doing his job” to pass on the concerns in Whitehall. Mr Diamond was worried - he told his Barclays team “you have to let them (Whitehall) we are fine”. His concern was that, if the Treasury concluded Barclays was struggling to raise cash, it could move in and rescue it - just as Barclays was doing a deal to find private capital.
2.46pm: Not good for Tory MP Jesse Norman that Bob Diamond keeps calling him by his first name. Am told they both worked for Barclays subsdiary BZW. All very pally.
2.38pm: Diamond is talking of the terrifying days in October 2008. With Barclays’ borrowing rate so high, Diamond was worried about the signal it was sending out to the Treasury. “If Whitehall was told Barclays was at the highest Libor they might say to themselves, my goodness they can’t fund, we have to nationalize them,” he says. Equally he feared that if the rumours spread that Barclays was having problem raising funds, they wouldn’t be able to complete a deal to find new private funding.
2.32pm: Sigh of relief from Balls, Darling, Vadera and all round. as Diamond says that the “Whitehall sources” quoted in the Barclays email as pressuring the Bank of England on its high Libor rate were “officials in the Government” not Ministers.
2.17pm: Action of a few traders in fixing the Libor rate was “reprehensible” says Diamond in his introduction. “I love Barclays”, he says. He says “the best way” for him to protect Barclays’ reputation was to quit. But history will judge the bank as “an incredible institution.”
2.10pm: Bob Diamond has arrived at Westminster for the hearing at the Treasury Select Committee. A lot of attention will focus on the Barclays “smoking email”, released last night, which embroiled the Bank of England and Whitehall in the fixing of the “Libor” rate - the percentage that banks are paying when lending to one another.
It may be worth pointing out that there are two very different fixes going on.
The first is the rate fixing prior to 2008, when Barclays traders pressured submitters at the bank to tweak the rate in order to make a quick buck on the financial markets. Barclays has apologised for this, but claims no senior managers knew about it.
The second is rate fixing during the financial crisis in 2008. Bob Diamond claims that all the banks were doing this at the time, as they sought to stave off hostile speculation which could have led to one of them going under. The Barclays email from last night suggests that Barclays also did so with the approval of the Bank of England and the Government. Arguably, all the players were doing here was telling a white lie in order to prevent a total system breakdown. However, it will hardly help reinforce the City’s reputation.
Let’s see how it goes.....
Search for a job
Search for a car
Search for a house
Weather for Edinburgh
Wednesday 22 May 2013
Temperature: 3 C to 13 C
Wind Speed: 23 mph
Wind direction: North west
Temperature: 5 C to 10 C
Wind Speed: 24 mph
Wind direction: North west