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Bob Diamond, Barclays Bank chief executive, has resigned with immediate effect.
The move follows the resignation of chairman Marcus Agius and comes less than a week after Barclays Bank was fined a record amount for trying to manipulate inter-bank lending rates.
Bob Diamond said he was stepping down because the external pressure on Barclays risked “damaging the franchise”.
British PM David Cameron has described the rigging of Libor rates as “a scandal”.
“I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth,” Bob Diamond said in a statement.
Bob Diamond, Barclays Bank chief executive, has resigned with immediate effect
He will still appear before MPs on the Treasury Committee to answer questions about the Libor affair on Wednesday.
“I look forward to fulfilling my obligation to contribute to the Treasury Committee’s enquiries related to the settlements that Barclays announced last week without my leadership in question,” Bob Diamond said.
Last week, regulators in the US and UK fined Barclays £290 million ($450 million) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.
Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress.
The Serious Fraud Office is also considering whether to bring criminal charges.
Marcus Agius, Barclays Bank chairman, has confirmed his resignation, as the bank promises a “root and branch review” following the inter-bank lending rate-fixing scandal.
In his statement, Marcus Agius said: “The buck stops with me.”
Last week Barclays was fined £290 million ($450 million) for attempting to manipulate the Libor inter-bank lending rate.
Barclays’ chief executive Bob Diamond will appear before MPs on the Treasury Committee on Wednesday.
Marcus Agius is due to answer their questions on Thursday.
Barclays said Marcus Agius would remain in his post until “an orderly succession is assured”.
Marcus Agius said last week’s events were evidence of “unacceptable standards of behavior within the bank”.
He said the findings had “dealt a devastating blow” to Barclays’ reputation.
Marcus Agius, Barclays Bank chairman, has confirmed his resignation, as the bank promises a "root and branch review" following the inter-bank lending rate-fixing scandal
As a result Barclays’ board has launched an audit of its business practices, which will be conducted by an independent body and report to the new deputy chairman, Sir Michael Rake.
The bank promised:
• a “root and branch review” of its “flawed” past practices
• a public report of the audit’s findings
• a new mandatory code of conduct for all staff
Barclays will establish a “zero tolerance policy” to anything that damages its reputation, the bank said in the statement.
Sir Michael Rake, BT chairman and senior independent director at Barclays, has been appointed deputy chairman at the bank. He is seen as a likely successor to Marcus Agius.
Sir John Sunderland, a non-executive director of Barclays, will begin the search for a new chairman from Monday.
Barclays was fined after the Financial Services Authority (FSA) found its traders had lied about the interest rate other banks were charging it for loans. Investigations are also under way at RBS, HSBC, Citigroup and UBS.
Giving a lower reading than the true rate would give the impression that Barclays was considered a better lending risk than it actually was.
Reporting a higher reading than the real rate could have inflated trading profits artificially, misleading investors and regulators.
Libor (London Inter Bank Offered Rate) is the rate at which banks in London lend money to each other.
Chief executive Bob Diamond said Marcus Agius’s decision “deserves all of our respect” and paid tribute to his six years as chairman: “He has been a thoughtful and supportive colleague to me in all of my roles – especially since I became chief executive last year.”
Bob Diamond also welcomed plans for an independent audit: “I am committed to ensuring that the recommendations from this review are implemented in full.”
He promised to “continue to build a culture that all of those with a stake in Barclays can be proud of”.
Bob Diamond, the boss of Barclays Bank, has insisted he will not resign after staff rigged the key lending rate between banks.
Bob Diamond was speaking at a meeting of analysts at US bank, Morgan Stanley.
And in a letter agreeing to give evidence to MPs, Bob Diamond condemned the inappropriate behavior of a “small number” of employees who had tried to make profits for their own benefit.
On Thursday, PM David Cameron said the bank’s management faced “serious questions” after it was fined £290m ($450 million).
Some MPs – including Tories Steve Baker and Nick De Bois – have suggested Bob Diamond should resign and former Liberal Democrat leader Paddy Ashdown said his position was now “untenable”.
Meanwhile, Barclays and other banks face the threat of criminal investigation in the UK over the scandal.
Royal Bank of Scotland has said that it expects to reach a settlement in a few months. One report said the bank faced a fine of £150 million ($240 million) for market manipulation but RBS said it did not recognize that figure.
Bob Diamond, the boss of Barclays Bank, has insisted he will not resign after staff rigged the key lending rate between banks
In his open letter to Andrew Tyrie MP, the chairman of the Commons Treasury Committee, Bob Diamond pointed out that authorities found no evidence that knowledge of the manipulation, for which it has been fined $450 million, went any higher than “immediate desk supervisors”.
But he admitted that the bank’s control systems should have been much stronger.
He added: “When the trader conduct was first discovered by more senior management, steps were immediately taken to stop it, and it was reported to the authorities.”
Bob Diamond’s comments come after Prime Minister David Cameron said: “The whole management team [at Barclays] have got some serious questions to answer. Let them answer those questions first.
“Who was responsible? Who was going to take responsibility? How are they being held accountable?”
Labour leader Ed Miliband said those Barclays staff found to have committed the wrongdoing “should face the full force of the law”.
Bob Diamond also said that Barclays was now “completing a review of employee conduct for all those involved”, and that “all appropriate options will be pursued for those who have a case to answer, ranging from the clawback or withholding of remuneration to being asked to leave the bank”.
Barclays was fined $450 million on Wednesday by the UK and US authorities after an investigation into claims that several banks manipulated the Libor rate at which they lend to each other.
Investigators say that Barclays’ traders lied to make the bank look more secure during the financial crisis and, sometimes – working with traders at other banks – to make a profit.
Barclays had acknowledged that its actions between 2005 and 2009 had fallen “well short of standards”.
The scandal has hit Barclays shares, which ended Thursday trading down 15.5%.
Other banks shares also fell, with RBS losing 11.5%, Lloyds down 3.9%, and HSBC giving up 2.6%.
Meanwhile, Chancellor George Osborne confirmed that HSBC, RBS, Citigroup and UBS were also under investigation.
The Serious Fraud Office subsequently said it was in talks with the Financial Services Authority (FSA) about the case. This could result in UK criminal proceedings being brought.
The US Department of Justice had already confirmed that criminal investigations into “other financial institutions and individuals” were ongoing.
Barclays’ misconduct relates to the daily setting of the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).
These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial deals between banks and other institutions.
They can also affect lending rates to the public, for instance with some mortgage deals.
The British Bankers’ Association asked the government on Thursday to consider taking over the regulation of how Libor is set.
The fine imposed on Barclays is part of an international investigation into the setting of interbank rates between 2005 and 2009.
Between 2005 and 2008, the Barclays staff who submitted estimates of their own interbank lending rates were frequently lobbied by its derivatives traders to put in figures which would benefit their trading positions, in order to produce a profit for the bank.
And between 2007 and 2009, during the height of the banking crisis, the staff put in artificially low figures, to avoid the suspicion that Barclays was under financial stress and thus having to borrow at noticeably higher rates than its competitors.
The FSA said Barclays traders were quite open about their routine attempts to manipulate rates.
“Requests to Barclays’ submitters were made verbally and a large amount of email and instant message evidence consisting of derivatives traders’ requests also exists,” the FSA said.
Martin Taylor, the former chief executive of Barclays, says the bank has engaged in “systematic dishonesty”.
It comes after Barclays was fined $450 million for trying to manipulate interest rates at which banks lend to each other.
Martin Taylor, who was chief executive of the bank from 1994 to 1998, said that Barclays’ deception looks like a deliberate strategy as it had been going on for years.
Other banks are also being probed.
The chief executive of Barclays, Bob Diamond, has come under pressure to resign.
Barclays has said its actions “fell well short of standards”.
In response, chief executive Bob Diamond and three other top executives at the bank are to give up their bonuses this year.
Investigators say that Barclays’ traders lied to make the bank look more secure during the financial crisis and, sometimes – working with traders at other banks – to make a profit.
Tracey McDermott, director of enforcement at the FSA, which imposed fines alongside the US financial regulator, said: “We have a number of investigations that are ongoing.
“Obviously we need to look at each case on its own particular facts but the initial indications are that Barclays was not the only firm that was involved in this.”
The US Department of Justice also said criminal investigations into “other financial institutions and individuals” was ongoing.
Martin Taylor, the former chief executive of Barclays, says the bank has engaged in "systematic dishonesty"
Other big names believed to be under investigation include Citigroup, JP Morgan, Deutsche Bank, HSBC and Royal Bank of Scotland.
Barclays’ misconduct relates to the daily setting of the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR).
These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial deals between banks and other institutions.
They can also affect lending rates to the public, for instance with some mortgage deals.
It is not yet clear whether Barclays staff actually succeeded in manipulating the interest rates to the bank’s advantage and therefore whether it had any impact on borrowers.
While the FSA said only that the Barclays employees had attempted to do so, the US Department of Justice said that on some occasions they did affect the LIBOR and EURIBOR rates.
The fine imposed on Barclays is part of an international investigation into the setting of interbank rates between 2005 and 2009.
Each day the British Bankers’ Association (BBA) and the European Banking Association publish the LIBOR and EURIBOR rates by taking an average of the estimated rates submitted to them by leading banks.
Between 2005 and 2008, the Barclays staff who submitted estimates of their own interbank lending rates were frequently lobbied by its derivatives traders to put in figures which would benefit their trading positions, in order to produce a profit for the bank.
And between 2007 and 2009, during the height of the banking crisis, the staff put in artificially low figures, to avoid the suspicion that Barclays was under financial stress and thus having to borrow at noticeably higher rates than its competitors.
The FSA pointed out that Barclays traders were quite open about their routine attempts to lobby their colleagues who submitted the bank’s estimate of its borrowing costs to the BBA.
It was particularly concerned because it appeared to be “accepted culture” among some staff.
“Requests to Barclays’ submitters were made verbally and a large amount of email and instant message evidence consisting of derivatives traders’ requests also exists,” the FSA said.
In one instance, a trader recounted a conversation in which he had “begged” the submitter to put in a lower LIBOR figure.
“I’m like, dude, you’re killing us,” he said.
His manager replied: “Just tell him to… put it low.”
In turn, the staff submitting the data would respond to the traders’ requests.
“For you…anything,” said one.
“Done… for you big boy,” said another.
And: “I owe you big time… I’m opening a bottle of Bollinger.”
