The UK’s financial regulator expressed concerns about cultural failings at Barclays under the leadership of Bob Diamond four months before the bank was hit with a fine that led to his dramatic resignation as chief executive.
The revelations came during Mr Diamond’s three-hour grilling by a parliamentary committee on Wednesday, a day after he stepped down from Barclays over the record £290m fine it received for attempting to manipulate interbank lending rates.
Andrew Tyrie, chairman of the Treasury select committee, said the Financial Services Authority was concerned about a “breakdown of trust” with Barclays and had demanded a cultural change at the bank.
“They felt there were some cultural issues,” Mr Diamond admitted. However he said these centred on the behaviour of managers further down the organisation and stressed the FSA was “pleased with the tone at the top”.
Mr Tyrie will ask Marcus Agius, Barclays’ chairman, to release a document that he said detailed the February FSA meeting, according to someone close to the situation. Mr Agius announced on Monday that he would resign later in the year.
bbc.co.uk
Barclays: MPs query Bob Diamond evidence
MPs who questioned former Barclays chief executive Bob Diamond on the rate-rigging affair have expressed surprise at some of his evidence.
Mr Diamond called the behaviour of those responsible for the Libor rate-rigging at the bank "reprehensible".
But Andrew Tyrie, chairman of the Treasury Committee, said some of what the banker said seemed "implausible".
And another committee member, David Ruffley, said he was not satisfied with Mr Diamond's explanation.
During three hours of questioning by the Treasury Committee, Mr Diamond said he had only learned the true extent of the scandal this month.
He had felt "physically ill" when reading incriminating emails from traders that they had conspired to manipulate the Libor rate.
THE GUARDIAN
Bob Diamond's evidence to MPs branded implausible
By Nicholas Watt and Jill Treanor
The ousted Barclays chief executive Bob Diamond is facing fresh pressure after the chairman of the House of Commons Treasury select committee described some of his evidence to MPs yesterday as "implausible", as the row grew over who was at the heart of manipulation of interest rates during the credit crisis.
Andrew Tyrie, who could take charge of a parliamentary inquiry into Britain's banking industry if MPs can reach agreement today, ratcheted up the pressure on Diamond by writing to Barclays over some of his evidence.
Hours after Diamond denounced the behaviour of some of his staff as "reprehensible", Tyrie said he would be asking Barclays for correspondence from the Financial Services Authority about its assessment of Diamond.
Tyrie said: "I think, cumulatively, the whole package looks somewhat implausible."
During a three-hour grilling by MPs yesterday Diamond told the treasury select committee of his disgust when he learned that traders at Barclays had manipulated interest rates in 2005. "When I read the emails from those traders I got physically ill. It is reprehensible behaviour and if you are asking me should those actions be dealt with – absolutely."
THE INDEPENDENT
There were 14 bad people at Barclays, but I wasn't one of them, says Bob Diamond
By Oliver Wright and James Moore
Britain's financial regulator was warned that banks were blatantly fixing interest rates in the run-up to the financial crisis but did nothing stop it, the former head of Barclays claimed yesterday. Bob Diamond told Parliament that Barclays had raised the issue of banks "under-reporting" the true amount they were having to pay to borrow money but were ignored. Asked if regulators "were asleep at the wheel", he said: "There was an issue out there. [It] should have been dealt with". Asked how bodies like the Financial Services Authority (FSA) had responded to the allegations, he replied: "Various levels of acknowledgement but no action."
DAILY EXPRESS
Bank of England boss asks to appear
The Bank of England chief caught up in the interest rate-fixing scandal has pleaded to be allowed to put his side of the story to MPs.
The bank said deputy governor Paul Tucker was keen to give evidence to the Commons Treasury Committee. He wants to clarify the bank’s and his own involvement after allegations over his role in the scandal that led to Barclays being fined for fiddling the London Interbank Offered Rate.
Mr Tucker was thrust into the spotlight by former Barclays chief executive Bob Diamond’s memo of a 2008 phone conversation, released this week, in which the deputy governor allegedly said “senior figures” in Whitehall were concerned that Barclays’ Libor rate was too high, which could be a sign of financial weakness.
CITYAM.COM
Diamond feared nationalisation
By James Waterson
Bob Diamond yesterday told MPs that he feared Barclays could have been nationalised if the bank did not reduce its Libor interest rate submissions in October 2008.
At that time Barclays was reporting funding costs at the top end of the scale, even though other banks were in much worse condition.
“They might say to themselves, ‘My goodness, they can’t fund. We need to nationalise them.’,” Diamond told the Treasury select committee.
“We were desperate. We had £6.7bn of equity being raised. If rumours got on the market that we couldn’t fund then maybe we wouldn’t have been able to complete the equity raising.”
THE TIMES
Clegg backs staff right to buy shares
By Mark Atherton
Nick Clegg has today called for employees to have a right to request shares in their own company as part of a move to create a more responsible John Lewis-style economy in the UK.
Speaking at a summit on employee share ownership, the Deputy Prime Minister said he wanted to see many more companies follow the example of the John Lewis Partnership, whose 81,000 staff own the 37 John Lewis shops and 280 Waitrose supermarkets.
He said employee share ownership was an old idea but could help build a new economy. “Employee owned firms have lower levels of absenteeism, higher productivity and growth rates. New research published today by co-operative UK shows that during 2011 employee-owned firms grew 50 per cent faster than the economy at large.”
Mr Clegg unveiled a review of share ownership by Graeme Nuttall, of the law firm Field Fisher Waterhouse, which calls on the Government to offer staff a right to buy shares in their company if at least 10 per cent of the workforce want to do so.
DAILY MAIL
Savers and pensioners horrified as BoE prepares to launch third round of quantitative easing to boost flagging Britain
By Hugo Duncan
The Bank of England looks set to unleash a third round of money printing in a desperate bid to drag Britain out of recession.
The monetary policy committee is widely expected to approve another tranche of quantitative easing on top of the £325billion it has already pumped into the economy.
The prospect of a third round of money printing – dubbed QE3 – will horrify Britain’s army of savers and pensioners who have been hammered by dwindling returns on their cash.
But another grim set of figures has fuelled fears that Britain is trapped in a prolonged downturn – forcing the Bank to act. A closely-watched survey by research group Markit said firms in the services sector, which includes everything from hairdressers to stock brokers, suffered their worst month since October and one of the worst since they started recovering three years ago.
The extra bank holiday for the Queen’s Diamond Jubilee depressed the economy, the report said, as additional spending on the high street was offset by fewer working days.
DAILY TELEGRAPH
Francois Hollande announces French tax grab on holiday homes
By Henry Samuel, Paris
Approximately 200,000 Britons own second homes in areas such as the Dordogne and other parts of France, particularly those serviced by budget airlines.
Now, however, holiday home owners find themselves in the sights of President François Hollande as he seeks to tax the better-off to reduce France's large budget deficit.
On Wednesday (July 4th), the French government announced it was to increase taxes on foreign-owned second homes. Tax on rental income would rise from 20 per cent to 35.5 per cent, and capital gains tax on property sales would rise from 19 per cent to 34.5 per cent. The extra in each case is being labelled a "social charge".
THE GUARDIAN
Savings fall as austerity squeezes household budgets
By Mark King
British consumers are saving less than they were a year ago, with almost a quarter saving nothing at all, according to a survey. The average monthly saving is now £87, down from £100 a year ago and £95 over the winter, according to National Savings & Investments' (NS&I) quarterly savings survey, which indicates people are fed-up with the lack of decent returns following three years of record low interest rates. The 23% of people who saved nothing in the second quarter of 2012 marked an increase from the 17% failing to save between January and March – an increase of about 3 million people nationwide, according to NS&I.
THE SUN
E.ON axes hated doorstep sellers
By Rhodri Phillips
Energy giant E.ON yesterday became the last of the Big Six gas and electricity companies to axe doorstep selling. The move brings an end to 15 years of the despised tactic in which cold callers tried to persuade customers to switch supplier.
E.ON had been under intense pressure after Scottish Power announced it was ending the technique last October.
Energy regulator OFGEM welcomed the move. Senior partner Andrew Wright said: “It is encouraging to see E.ON is addressing Ofgem’s concerns.”
He added that competition in the retail market had been “stifled by a combination of tariff complexity, poor supplier behaviour and lack of transparency”.
Audrey Gallacher, of watchdog Consumer Focus, said energy firms were “trying to turn a corner on consumer trust”.
THE TIMES
Apple strikes a mini blow against all those who would challenge the iPad
By Murad Ahmed, Technology Reporter
Google’s hopes of gaining a strong foothold in the tablet market have been dealt a blow by reports that Apple is developing a smaller, half-priced version of its bestselling iPad.
Company insiders told Bloomberg that Apple hoped to sell the device for $199 (£127) — half the cost of the present iPad, which ranges between £399 and £699. The so-called iPad mini could be released by the end of the year.
The new tablet’s screen is likely to measure between 7in and 8in diagonally but lack the high definition “retina” screen that is part of the latest version of the iPad, released in April.
It will also be confronting some determined competition. Amazon has sold millions of its 7in Kindle Fire tablet, which was released last year and costs $199. It is available only in the United States but is expected to go on sale in Britain this year.
Google has just unveiled the Nexus 7, a 7in tablet computer that costs £159 and goes on sale in Britain this month. Built by Asus but branded by Google, it has a faster processor than the Amazon Fire and also features a front-facing camera.
