Barclays Three Top Executives Quit from Bank of England Dispute

Barclays Three Top Executives Quit from Bank of England Dispute

Things usually happen in threes and now Barclays PLC (NYSE:BCS) (LON:BARC)  has seen three executives exit the firm from the growing Bank of England dispute.

The first domino to fall was Robert Diamond; he stepped down as chief executive on Tuesday and was quickly followed by the chief operating officer, Jerry Del Missier, reported Bloomberg.

Next up is Barclay’s Chairman Marcus Agius. He will leave after finding Diamond’s replacement.

The executive exits come after regulators have fined the bank a record-setting 290 million pounds ($455 million) from attempts to rig the London interbank offered rate. Diamond resigned after initially dragging his feet and at the request of the Bank of England Governor Mervyn King and the the regulator, the Financial Services Authority, Chairman Adair Turner, reported the British Broadcasting Corp.

On Tuesday, Diamond said he would include the review’s finding into the way the bank set the Libor. U.K. regulators are pondering whether to begin a criminal investigation into Libor-fixing.

Diamond had said in a statement, “The external pressure placed on Barclays has reached a level that risks damaging the franchise. I cannot let that happen. 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.”

But perhaps an audit trail was the nail in the coffin for Diamond.

A Damaging Document Appears

As Diamond waited to appear before lawmakers on Wednesday, the lender disclosed a damaging note from a 2008 call that supposedly showed that Paul Tucker, the central bank’s former markets director, suggested that Barclays could decrease its Libor rates.

Diamond wrote in an Oct. 30 e-mail to then CEO John Varley and Del Missier, “Tucker stated that the levels of calls he was receiving from Whitehall were ‘senior’ and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently.”

In addition, Diamond didn’t think he had either received any instructions or that he relayed orders to Del Missier to cut the bank’s submissions disclosed bank documents provided to lawmakers, reported Bloomberg. Del Missier determined that the Bank of England had told the firm to not keep Libor at a high rate and informed rate-setters to cut their submissions, said Barclays.

In a conference call with journalists on Tuesday, Agius said, “As a result of what he believed was a genuine misunderstanding, Jerry was the most senior officer who gave instructions to lower Libor rates. That obviously puts him in a very difficult situation.”

And one that most likely resulted in his resignation. The Bank of England hasn’t not commented on the document.

Here’s our take on Diamond’s and Missier’s resignations.


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