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Bob Diamond admits FSA concern over Barclays’ culture

Bob Diamond TSC 480

Former Barclays chief executive Bob Diamond has denied claims the FSA expressed a lack of confidence in the bank’s senior executive team earlier this year but admits the regulator had concerns about “culture issues” further down its management structure.

In a Treasury select committee evidence session today, TSC chairman Andrew Tyrie asked Diamond if it is true the FSA told the bank’s’ board in February that trust between the two parties had broken down and it no longer had faith in its executive team. Tyrie also asked if a letter existed stating these concerns but Diamond denied its existence.

Responding to the claims the regulator had lost confidence in Barclays’ executive team, Diamond replied: “No, Sir”.

Asked about what was discussed in the meeting in February, Diamond said: “There was a discussion that as you got down into the organisation they felt that there were some culture issues, that people sometimes pushed back and that the push back was not always filtered back to the top.

“It was part of an annual review so there will always be things they will be critical of and think we can do better. But they were specifically pleased, and said so to the board, with the tone at the top, referring in particular to [finance director] Chris Lucas and myself and my colleagues on the executive committee.”

Both Diamond and chief finance officer Jerry del Missier resigned from the bank in the wake of US and UK regulators slapping a fine totalling £290m onto Barclays’ in the wake of the rate-fixing.

Barclays chairman Marcus Agius resigned last week but has decided to stay at the bank until a new chief executive is appointed.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Duncan Carter 4th July 2012 at 9:32 pm

    I think it is appropriate to ask what exactly did the FSA then do about this?

    A very interesting contrast with the Honister situation

  2. Julian Stevens 5th July 2012 at 8:34 am

    As far as the FSA’s involvement is concerned, I suppose the key question has to be how much time elapsed between when the FSA first became aware of or at least suspected that Barclays was manipulating LIBOR rates and when it launched its investigation. One assumes also that the FSA would have been duty bound to draw promptly to the attention of the BoE its concerns on a matter of such gravity.

    If it was no more than a couple of months, then the FSA can hold its head up and claim legitimately that it got straight on the case as soon as was reasonably possible.

    If, on the other hand, the period of time before the FSA got stuck in was considerably longer, then it [the FSA] must explain exactly why.

  3. Now we’re starting to see the light on why the top people at the FSA are bailing out. They’re getting out because they sat on their hands, maybe under orders, whilst this whole sorry mess was going on. If the FSA had concerns, like we all did, in respect of Barclay’s behaviour what steps did they take exactly to stop it happening? A fine years later to pay for their ever increasing budget was hardly the response you would have expected from the regulator. We’ll never know the full truth of this, but what we do know this stinking mess is only the start of the revelations from our major banks.

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