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Hector Sants defends FSA handling of Bob Diamond appointment

Hector Sants

Former FSA chief executive Hector Sants has blasted “incorrect” claims made by Barclays that the FSA did not discuss Libor when approving Bob Diamond’s appointment as chief executive.

During the Treasury select committee’s inquiry into the Libor scandal, former Barclays chairman Marcus Agius told the committee that the FSA did not raise the investigation into Libor manipulation when appointing Diamond in September 2010.

He said: “These matters were not raised by the FSA at that time as casting doubt on his suitability as CEO.”

Two days after the publication of the TSC report into the Libor scandal, on 18 August this year, Sants wrote to TSC chair Andrew Tyrie. In the letter, published today, Sants produced FSA minutes of a meeting with Agius approving Diamond’s appointment on 15 September 2010.

The minutes state: “Sants explained that in reaching a judgement on this appointment the FSA had taken into consideration an ongoing investigation with regard to Libor that involved both the FSA and US Commodities Futures Trading. Therefore agreeing to Diamond’s appointment at this time was on the basis that the current view of the investigation does not have an adverse effect. However, Sants stressed that this is an ongoing investigation and the FSA’s position could change so the board should be aware. Agius confirmed that he will notify Diamond.”

In his letter, Sants blasted Agius’ remarks as “not correct” and claims the FSA was “fully aware” of the Libor problem but did not want to pre-judge the outcome of the investigation.

He wrote: “I specifically made clear that we reserved the right to re-assess his suitability in the light of the conclusions reached but this point was not made in the letter [confirming Diamond’s appointment] because we did not wish to prejudice our enforcement process.”

On 13 September, Tyrie replied to Sants saying: “You tell us that you told him [Agius] that the FSA’s view on Diamond’s suitability might change as a result of the Libor investigation. Your view is supported by the FSA’s minutes of your meeting with him.”


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

  1. If they had doubts as to this possible suitability to hold the post why would they not refuse to authorise him until such times as they had all the facts. I know an IFA whose authoristion was was postponed pending the outcome of a possible complaint. 7 months later when the matter was cleared up in the IFA’s favour, they decided to authorise him. Why the double standards? Is it old boys network at its best I wonder? It proves to me that the FSA is and never was fit for purpose.

  2. Yes…..but he still got the job.

    The bumbling airhead strikes again.

    Maybe in assessing Diamond’s suitability for the job it may have been better to adopt the same approach as the FSA have with IFAs; that is, guilty – until proven innocent.

    Sadly for Mr.Diamond, he didn’t even get the chance to do some gap-filling…….

  3. Only shoot the unarmed first – IFAs – let the ‘Bank’ Robbers get away with it (pending reports & investigations). Tough words eh – ‘we reserve the right’ Barclays obviously felt very afraid!

    Thanks for ruining an industry Hector & keeping quiet about the Banks until it was to late.

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