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Former bank CEO gets a grilling

July 4, 2012

Testifying on a rates-fixing scandal, former Barclays CEO Bob Diamond has said the bank made "mistakes" and was guilty of "reprehensible" behavior under him. He said Barclays had acted quickly to correct its errors.

Barclays PLC and its subsidiaries will pay about $453 million to settle charges of manipulating interest rates
Image: AP

"The attitude of Barclays three years ago when this was recognized was ‘Let's get to the bottom of it,'" Diamond, who quit along with chief financial officer Jerry Del Missier on Tuesday, told a British parliamentary committee on Wednesday.

Former chairman Marcus Agius resigned Monday.

Last week, Barclays was fined 290 million pounds ($455 million, 360 million euros) by British and US regulators for the bank's attempted rigging of the Libor and Euribor interest rates.

Libor is a flagship London instrument used throughout the world; Euribor is its eurozone equivalent. The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.

Manipulating rates could have given the impression that the bank was in a stronger position financially than it really was.

In his defense, Diamond said that other banks were reporting lower borrowing rates in October 2008, the moment of the alleged fixing, which risked Barclays' efforts to attract investment from Qatar and elsewhere. A high interest rate can indicate that a bank is having financial trouble and needs to pay more to borrow money. Diamond told the committee that there had been a fear that the British government would be alarmed by Barclays' high borrowing rates and conclude that the bank was in trouble.

"I'm sorry, I'm disappointed, and I'm also angry," Diamond told the parliamentary committee. "There is absolutely no excuse for such behavior. It is wrong. I'm not happy about it. It does not represent the Barclays I know and love."

Barclays is also being investigated for allegedly manipulating Libor rates as far back as 2005 to increase profits.

mkg/msh (AFP, AP, dpa)