Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Barclays bank former Chief Executive Bob Diamond arrives at Portcullis House to attend a Treasury select committee hearing in Westminster, London July 4, 2012. Barclays chief executive Bob Diamond, who quit this week over an interest rate-rigging scandal, will be questioned by British politicians on Wednesday, when he could drag the Bank of England, the government and rival banks deeper into the Libor interest rate affair. (LUKE MACGREGOR/REUTERS)

Barclays bank former Chief Executive Bob Diamond arrives at Portcullis House to attend a Treasury select committee hearing in Westminster, London July 4, 2012. Barclays chief executive Bob Diamond, who quit this week over an interest rate-rigging scandal, will be questioned by British politicians on Wednesday, when he could drag the Bank of England, the government and rival banks deeper into the Libor interest rate affair.

(LUKE MACGREGOR/REUTERS)

FSA warned Barclays on Diamond approval Add to ...

Britain’s financial regulator warned Barclays PLC two years ago that its approval of Bob Diamond as chief executive could change if there was an adverse outcome from the Libor interest rate rigging investigation, documents showed.

Andrew Tyrie, the chairman heading a parliamentary inquiry into the Libor scandal at Barclays, said the evidence in the documents was “at variance” with the impression it received from Barclays Chairman Marcus Agius when it quizzed him in July.

More Related to this Story

The Financial Services Authority (FSA) released documents to Mr. Tyrie after a report by his committee indicated the regulator had not raised Libor as a concern at the time it approved Mr. Diamond’s promotion to CEO.

The regulator said on Wednesday that a September 2010 file note of a meeting between its CEO Hector Sants and Mr. Agius, at which the approval of Mr. Diamond was discussed, said Mr. Sants “stressed that this is an ongoing (Libor) investigation and the FSA’s position could change so the board should be aware.”

Mr. Diamond resigned in July after Barclays was fined over $450-million (U.S.) for rigging Libor benchmark interest rates.

The Libor inquiry unearthed long-standing criticism by the FSA of Barclays for having an aggressive culture and for taking too many risks.

Lawmakers at the inquiry also accused Mr. Diamond, who had long been one of the most high profile and highest paid bankers and who became Barclays CEO at the start of 2011, of misleading them.

The file note, released by Mr. Tyrie’s Treasury Select Committee, also said Mr. Sants told Mr. Agius that the regulator’s relationship with Mr. Diamond had to improve.

“HS (Sants) explained that the relationship with BD (Diamond) had not reached the level of openness, transparency and willingness to air issues with the FSA as is the case with John Varley,” it said, referring to Mr. Diamond’s predecessor as CEO.

It said Mr. Agius agreed and would make sure Mr. Diamond “steps up” to improve and that Mr. Varley would “coach” him to help the relationship.

The note said Mr. Agius said “whilst BD (Diamond) is very competitive ... he suspects he will now see him mature and relax given he has now achieved his goal” of becoming CEO.

Barclays declined to comment on the latest documents.

Its new CEO Antony Jenkins has promised to move quickly and boldly to reform culture. Agius resigned over the rate-rigging and will be replaced in November by corporate governance expert David Walker.

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular