NEW YORK—Robert Diamond, British banking giant Barclays Plc’s chief executive officer, announced his resignation Tuesday as the latest casualty of the widening Libor rate-fixing scandal plaguing the bank.
One of his top lieutenants, Jerry del Missier, the bank’s COO, also resigned Tuesday.
“The external pressure has reached a level that risks damaging the franchise—I cannot let that happen,” Diamond said Tuesday in a statement.
Last week, Barclays settled with U.S. and U.K. banking regulators for 290 million pounds ($453 million) on allegations that it manipulated Libor rates by submitting false rates. The Libor is an average of top banks’ borrowing rates, and interest rates on everything from credit cards, mortgages, and bank loans derive from Libor rates.
The announcements come just one day after the bank’s chairman, Marcus Agius, said, “The buck stops with me,” and volunteered his resignation. However, Agius’s departure failed to appease shareholders and regulators who continued to put pressure on the bank.
Following Diamond and del Missier’s departure, effective immediately, Agius would stay onboard to lead the search for a new CEO.
Big Blow for the Bank
Diamond and del Missier’s departures are a huge hit to Barclays, which during their tenure has become one of the world’s biggest investment banks.
Diamond, an American, and del Messier, a Canadian, have been at the bank for more than 15 years and saw the bank through the financial crisis of 2008 as well as its Lehman Brothers acquisition.
Both individuals rose through Barclays’s investment bank—formerly called Barclays Capital—from its humble beginnings to its status today. Their departures leave a leadership void at the top, according to analysts.
A leading candidate to replace Diamond as CEO is Antony Jenkins, head of Barclays’s retail bank division. The bank is also looking for external alternatives. Richard Ricci, formerly co-CEO of Barclays Capital with del Missier, will continue to lead the corporate and investment bank.
Bank of England Implicated
Diamond is expected to appear in front of a Treasury select committee of MPs to answer questions regarding his role in the Libor rate-fixing scandal.
According to reports, Diamond is expected to testify that Bank of England officials ahead of the banking crisis told him that the rates submitted by Barclays were too high, and suggested that Barclays lower their submissions as not to spook investors.
An email was released Tuesday in support of Diamond’s assertions from Bank of England Deputy Governor Paul Tucker.
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