Former Barclays chief executive Bob Diamond says he felt “physically ill” when he read emails from some of the bank’s traders who sought to influence the Libor and Euribor rates it submitted to the British Bankers’ Association.
Last week, Barclays was fined £290m by the FSA and US authorities for rigging the Libor and Euribor rates. The £59.5m fine from the FSA was the largest in its history. Barclays was also fined £128m by the US Commodity Futures Trading Commission and £102.6m by the US Department of Justice, bringing the total fine levied against Barclays to £290.1m
The FSA’s final notice, published last week, shows between January 2005 and May 2009, the bank’s derivative traders made 173 attempts to influence US dollar Libor submissions, 58 attempts to influence Euribor submissions and 26 attempts to influence yen Libor submissions.
An estimated 14 traders were found to have emailed the bank’s rate submitters in an effort to influence the rates Barclay’s submitted, purely to improve their own trading position and profit levels.
At a Treasury select committee evidence session today, TSC member David Ruffley asked Diamond if these actions should lead to custodial sentences being given to bankers.
Diamond replied: “When I read the emails from those traders, I got physically ill. If you are asking me those actions should be dealt with then absolutely. Immediately, when it became clear during the investigation that there was specific actions to be dealt with at the time, we did not wait until the end of the investigation.
“There were times when it was helpful to the investigation for people to be placed on suspension as opposed to terminated. But I want to assure you David, that behaviour was reprehensible, it was wrong. I am sorry, I am disappointed and I am also angry. There is absolutely no excuse for the behaviour that was exhibited in those activities and the types of emails that were written.”
He added that the emails broke the bank’s “no jerk rule” which means that “if people do not behave they have to leave”.
Barclays chairman Marcus Agius resigned last week but has decided to stay at the bank until a new chief executive is appointed.