Former bank boss rejects criticism

The ex-chief executive said claims that he was “less than candid” when he appeared before the Commons Treasury Select Committee last week were “totally unfair and unfounded” - and indicated he was ready to be questioned again to defend his reputation in the wake of the rate-rigging scandal.

The rejection came in a letter to committee chairman Andrew Tyrie sent following an evidence session with Barclays chairman Marcus Agius yesterday.

During the hearing, Mr Agius - who has signalled he will step down after a replacement for Mr Diamond is found - admitted that Barclays’ relationship with the Financial Services Authority (FSA) was “strained”.

The committee cited a FSA letter sent to Barclays that raised concerns about “a pattern of behaviour” in which the bank sought to gain advantage through the use of complex structures which are “at the aggressive end of interpretation of the relevant rules and regulations”.

Mr Tyrie and other members insisted the evidence contradicted what they heard from Mr Diamond, who denied knowing that regulators were concerned, and suggested that his presentation of what happened “was quite a long way away from what really happened”.

Labour member John Mann said Mr Diamond had “serially misled” Parliament on a range of issues and said it was the majority view of the committee that Mr Diamond should be recalled.

In his letter responding to the allegations, Mr Diamond stressed that he had not been questioned about the period when the FSA had raised concerns, in April this year.

“Having watched the committee’s session I was dismayed that you and some of your fellow committee members appeared to suggest that I was less than candid with the committee last week,” Mr Diamond wrote in his letter of Mr Tyrie.

“Any such suggestion would be totally unfair and unfounded.”

He continued: “The comments made have had a terribly unfair impact upon my reputation, which is of paramount concern to me. I look forward to discussing this issue with you further if you wish to do so.”

During yesterday’s dramatic session, Mr Agius disclosed that Mr Diamond was “voluntarily” waiving a potential £20m in deferred share bonuses.

But the ex-chief executive will walk away with a £2m package, made up of a year’s salary and pension cash contribution, after quitting.

Mr Diamond said he hoped the agreement “will help close this chapter and allow Barclays to move forward and prosper” after the bank was fined £290m for attempting to fix the interbank borrowing rate Libor.

Prime Minister David Cameron’s official spokesman said: “I think the decision to forgo the bonus is a sign that they understand public concerns and that they understand that there is a need for a change in the culture of banks.”

Mr Diamond quit last Tuesday as the full scale of the scandal emerged.

He said in his appearance in front of MPs last Wednesday he felt “physically ill” when he discovered traders at his bank were manipulating the inter-bank rate.

Mr Agius was the third high-profile witness to appear before the Committee since last week as MPs sought to get to the bottom of the Libor scandal that has rocked the banking industry.

Bank of England deputy governor Paul Tucker appeared in front of the Committee on Monday and said he “absolutely” rejected suggestions he had leant on Barclays to manipulate a key lending rate or that Labour ministers had encouraged him to do so.