Diamond defies calls to quit as rate-rigging inquiry launched

The embattled bank’s chief executive showed no sign of following chairman Marcus Agius, who fell on his sword yesterday in the wake of rate-rigging revelations.

Mr Agius, 65, who was chairman for six years, said he was “truly sorry” and announced an internal review into “flawed” practices.

But in a letter to employees, Mr Diamond indicated he would not step down, telling them: “I am committed to ensuring the recommendations of this review are implemented in full.”

The American banker, who faces a grilling from MPs on the Treasury Select Committee tomorrow, said he was disappointed the attempts to fix the Libor, the rate at which banks lend to each other, happened on his watch and would “make sure that it cannot happen again”.

Mr Diamond told staff it had been “an incredibly tough period” for them given the “nature and volume of negative comment” against Barclays.

“I understand why the reaction has been severe,” he said. “No one is more sorry, disappointed and angry about these events than I am. I am angry because the impression has been given that the behaviour revealed in the documents last week is indicative of the culture at Barclays generally.”

Turning to taking action against those involved, Mr Diamond said that an internal disciplinary process, which began some time ago, will be completed swiftly.

Announcing his resignation yesterday, Mr Agius said: “As chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside.”

Mr Agius, who will also face the Treasury Select Committee on Thursday, will remain in post until an “orderly succession is assured”, while Barclays non-executive director Sir Michael Rake has been appointed deputy chairman.

He has also resigned from his role as chairman of the British Bankers’ Association.

Labour leader Ed Miliband said Mr Agius’s departure was not enough and repeated his call for Mr Diamond to step down.

Deputy Prime Minister Nick Clegg also ramped up the pressure on the banker yesterday, saying the buck should stop at the top.

He said: “I’m like everybody else in this in that now that the chairman of Barclays has fallen on his sword and has taken responsibility for what has happened, everybody is asking when are the other senior people at the top of Barclays going to take responsibility for the things that happened on their watch.

“I don’t think it is for politicians to individually hire and fire bankers, but I do think the buck stops at the top.”

He added: “These are people, let’s remember, who were paid a lot of money with big, fat bonuses in the good times and they need to also take responsibility in the bad times. They need to take the rough with the smooth.”

Business Secretary Vince Cable also launched a stinging attack on the banking industry, claiming senior industry figures “still don’t get it”.

The Lib Dem cabinet minister said it was becoming “increasingly clear” that the management of Britain’s banks “want to choose the high risk, high reward” path when it was “vital” for the public they did not.

Addressing the Association of British Insurers yesterday he said the rate-rigging revelations strike many “as bordering on the criminal”.

“Now we are learning that this daredevil behaviour included taking blatant risks, once again to the detriment of the shareholder,” he added.

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