Bank inquiry launched after Libor rate-rigging scandal..Diamond and del Missier quit
Prime Minister David Cameron has announced a full parliamentary inquiry of the banking sector following the Barclays rate-rigging furore.
He told the House of Commons the manipulation of the Libor interest rates had been a “scandal”.
The review will run alongside a narrower inquiry specifically into the Libor market, also announced on Monday.
The comments follow news the Serious Fraud Office is considering whether to bring criminal charges.
In addition, Barclays will conduct its own “root and branch review” after receiving a fine of £290m ($450m) over the Libor affair.
Mr Cameron said the full parliamentary committee of inquiry would be headed by the chairman of the Treasury Committee, Andrew Tyrie.
“This committee will be able to take evidence under oath, it will have full access to papers and officials and ministers including ministers and special advisers from the last government,” he said.
Mr Cameron said the review should ensure the UK had the “toughest and most transparent rules of any major financial sector”.
He added: “Bankers who have acted improperly should be punished,” and it was important to learn the lessons of the affair.
But Labour leader Ed Miliband said the review did not go far enough, calling instead for an inquiry which was independent of bankers and politicians.
Barclays chief executive Bob Diamond suddenly quit on Tuesday over an interest rate-rigging scandal that threatens to drag in a dozen more major lenders but suggested the Bank of England had encouraged his bank to manipulate the figures.
“The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen,” said Diamond, 60. The terms of his severance were not announced, though Sky News said the bank would ask Diamond to forfeit almost 20 million pounds ($30 million) in bonuses.
Politicians and newspapers have zeroed in on the scandal – which revealed macho e-mails of bankers congratulating each other with offers of champagne for helping to fiddle figures – as an example of a rampant culture of wrongdoing in an industry that stayed afloat with huge taxpayer bailouts.
Barclays released an internal 2008 memo from Diamond, then head of its investment bank, suggesting that the deputy governor of the Bank of England, Paul Tucker, had given Barclays implicit encouragement to massage the interest figures lower during the peak of the financial crisis in order to present a better picture of the bank’s financial position.
According to the memo, Tucker told Diamond he had received calls from senior government officials. “It did not always need to be the case that we appeared as high as we have recently,” Diamond said he had been told.
“Barclays today announces the resignation of its chief operating officer, Jerry del Missier with immediate effect” following the departure of chief executive Bob Diamond and chairman Marcus Agius, a company statement said.
The move came hours after Diamond announced he was stepping down over an interbank loan rate scandal. Agius had announced he would quit on Monday.
Del Missier was previously president of Barclays Capital and co-chief executive of corporate and investment banking. He only took up the role of COO last month.
He said in a statement he was “proud” of what Barclays had achieved.
“We built one of the premier global investment banks from scratch — something that we are all very proud of,” he said.
dropping like flies..and its spreading to the fed in the USA..bring it all out into the light..shine on..expose these crooks..