AROUND £3.7bn was wiped off the value of Barclays’ shares yesterday as anti-fraud investigators looked into the interest rates scandal and George Osborne said the bank’s executives should “pay the price”.

Barclays’ shares fell up to 18 per cent as chief executive Bob Diamond and chairman Marcus Agius were left clinging on to their jobs.

After a day of intense speculation over his future, Diamond published a letter in which he attempted to explain the bank’s actions in manipulating the interest rate known as Libor. He said that the bank’s prime motivation in acting as it did was to protect itself from suggestions that it was in financial difficulties. He hit out at other banks too, saying that their actions forced Barclays to act in the way it did.

Although he said the decision to do what the bank did was wrong, he did not adopt the tone of a man contemplating resignation.

Barclays’ shares closed down 15.53 per cent and dragged down the rest of the sector with Royal Bank of Scotland sinking 11.45 per cent and Lloyds and HSBC dropping 3.9 per cent 2.58 respectively.

Prime Minister David Cameron joined the political backlash against Barclays and said management had “serious questions” to answer. His spokesman said there had been a discussion of the possible “criminal aspects” of the long-running bid to rig the rate at which banks lend to each other. It came as Osborne described the bank’s behaviour as “an epitaph to an age of irresponsibility”. He later said that HSBC, RBS, Citigroup and UBS are also under investigation. Labour leader Ed Miliband called for criminal prosecutions against Barclays.

Barclays and the other major banks will face further embarrassment today when the FSA is expected to reveal evidence of the improper sale of interest rate swap products to small businesses. The regulator has completed an initial review after claims Barclays, HSBC, Lloyds and RBS pushed firms to take out interest rate swap products. Analysts warn that potential claims from swaps mis-selling could reach hundreds of thousands of pounds, or even millions.