BARCLAYS chief executive Bob Diamond is set to be hauled before parliament after the bank was fined £290m for its part in a global conspiracy to fix the rate at which banks lend to each other.
Diamond will face questions from the Treasury Select Committee after regulators in Britain and the US slapped record punishments on Barclays over its attempts to manipulate the London interbank offered rate (Libor) and its European equivalent, Euribor.
The bank must pay £59.5m to the Financial Services Authority and a further $360m (£231m) to US regulators in the first major victory for watchdogs over attempts to rig Libor, which underpins trillions of dollars of derivatives contracts worldwide and is also widely used as a reference rate for corporate lending.
Diamond said Barclays had lost sight of its “culture and values” during the affair, which occurred between 2005 and 2009, before he was promoted to chief executive.
Barclays will also pay fines of $200m to the US Commodity Futures Trading Commission (CFTC) and $160m to the US Department of Justice. The bank attempted to manipulate Libor submissions “sometimes on a daily basis”, according to the CFTC.
Last night Andrew Tyrie, chairman of the Treasury select committee, told City A.M.: “There has been lying, it is shocking. The banks were acting in concert, so this is not the end of the story.”
Chris Leslie, shadow financial secretary to the Treasury, said: “We now need to know how many employees were complicit in this process, how many will be losing their jobs as a result, and whether this needs to now go beyond the regulators and into a criminal investigation.”
Regulators around the world, including the EC and Japan’s Financial Services Authority, are looking into the manipulation of Libor. Several banks, including Citigroup, HSBC, Royal Bank of Scotland and UBS, have been approached but no criminal charges have been filed.
Yesterday Barclays said Diamond, the chief executive, as well as finance director Chris Lucas, corporate and investment banking head Rich Ricci and chief operating officer Jerry del Missier said they would not take a bonus.
Diamond said the fines covered “past actions” when its standards “fell well short”.
“When we identified those issues, we took prompt action to fix them and co-operated extensively and proactively with the authorities... I am sorry that some people acted in a manner not consistent with our culture and values.”
Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: “Barclays’ misconduct was serious, widespread and extended over a number of years. The integrity of benchmark reference rates such as Libor and Euribor is of fundamental importance to both UK and international financial markets.”