Bob Diamond resigned as Barclays chief executive after Mervyn King called the bank’s chairman Marcus Agius to a meeting and told him Diamond no longer had the support of the FSA.
Diamond (pictured) quit as chief executive last Tuesday. Giving evidence to the Treasury select committee this morning, Barclays chairman Marcus Agius said that he and senior non-executive director Sir Michael Rake were called to meet BoE governor Mervyn King the night before.
He said: “It was made very plain to us that Bob Diamond no longer enjoyed the support of his regulators, the Governor was very clear to say he had no power to direct us but he felt this was sufficiently important, as it was, for us to be told in absolute terms what the situation was.”
Agius told MPs that he thought this was a shock because when on the Wednesday before, Barclays released details of its £290m settlement with the FSA and two US authorities admitting that the bank had attempted to manipulate its Libor submissions the FSA had said nothing about the suitability of Diamond or any other senior management.
Agius said: “Clearly what had happened was that the public outcry had been far greater than we had thought, my own resignation which I had sought to offer to alleviate some of the pressure was inadequate and clearly the regulators decided more is necessary.”
Agius was reinstated as chairman after Diamond’s departure.
TSC chair Andrew Tyrie said: “What you have described is direct exercise of considerable regulatory authority. Effectively for a brief while the taking over of the top of Barclays’ management structure by the Bank of England.”
Giving his evidence last week, Diamond refused to say whether regulators were behind his decision to quit.