Ex-barclays chief admits mistakes after interest rate scandal

ex-barclays chief admits mistakes after interest rate scandal

Those responsible had also been held to account. Barclays, the major bank, must pay 290 million pounds (345 million euros) to regulators in the U.S. And the U.K. And to the U.S. Department of justice for manipulating the bank’s lending rates.

The criticism of the british central bank, previously made public in documents of the bank, was not repeated by diamond before the committee. He did not assume that the statements made by the deputy head of the central bank, paul tucker, were to be understood as a call to manipulate the libor rate. "I didn’t feel that it was a directive."His personal fear was that the government did not trust barclays to bail itself out of the financial crisis and was therefore considering nationalizing the big bank.

From documents previously distributed by barclays, it is clear that tucker was appointed to the position on 28. On october 2008, the then labor-led ministry of finance allegedly passed on a recommendation to diamond – then head of investment banking – by telephone. Accordingly, tucker is reported to have said, "…It doesn’t always have to be the case that we appear as high as we have been…".

Diamond said he passed it on to then-barclays chief executive john varley and his right-hand man jerry del missier. He did not admit personal guilt. From the day of the speech, the libor rate fell rapidly. Three days later, the emirate of abi dhabi stepped in with massive cash injections at barclays.

Libor is the interest rate at which banks lend money to each other. If a bank reports a high libor rate, this can be interpreted as a sign of weak capitalization. Tucker asked wednesday to also be allowed to testify before the committee "as soon as possible".

The interest rate manipulation scandal also cost board member del missier his job. The bank is now being managed on an interim basis by marcus agius, who has also announced his withdrawal from the board of directors.

In addition to barclays, other banks from europe, the u.S. And asia are also in the sights of regulators, including deutsche bank. Diamond called it "unfortunate" that barclays was the first bank to be identified as sunder by regulators. There are also problems at other banks.

Bonn business law expert daniel zimmer called for consequences in the "handelsblatt" newspaper (thursday). "Reference rates must in the future be determined on a non-manipulative basis," the professor said. The previous system was susceptible to fraud attempts.

The deputy prime minister in the uk, nick clegg, said in a newspaper interview that the uk banking system was "rotten to the core" in 2008. "As a state, as a society, we cannot afford a banking system that throws everything else out like a cuckoo in the nest and that places a heavy burden on the british taxpayer," the liberal democrat told the evening standard.

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