guardian.co.uk,
David Batty, Saturday 7 July 2012
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| Barclays chief executive Bob Diamond leaves the Treasury select committee at Portcullis House. Photograph: Lefteris Pitarakis/AP |
A former
senior Barclays employee has claimed that the bank's ex-chief executive Bob
Diamond would have known that his traders were involved in the interest rate
rigging scandal.
The
whistleblower's accusation comes after the bank announced on Friday that it had
begun a formal investigation into attempts to fix Libor, meaning that criminal
charges could be brought against implicated traders.
The banker
alleged that Barclays executives would have been informed about Libor concerns
in 2008, adding that staff knew they faced the sack if they failed to inform
senior managers of untoward behaviour.
Speaking
anonymously to the Independent, the banker said: "Libor fixing was
escalated by several people up to their directors. They would then have
escalated it up the line because at Barclays if you don't escalate, and it is
found out that you haven't, it is grounds for disciplinary action. You will be dismissed."
The
director of the Serious Fraud Office, David Green, said on Friday that he had
"decided to formally accept the Libor matter for investigation" after
reviewing the information provided by the Financial Services Authority (FSA)
which last week fined Barclays £290m for attempting to manipulate the price of
Libor, the London interbank offered rate.
The fine
related to events that took place between 2005 and 2009 when the bank was found
to have manipulated the prices it submitted to help its own traders and rival
banks' traders. Part of the fine also related to attempts by the bank to lower
its Libor submissions during the 2008 banking crisis to reduce the chance that
it was regarded as being in financial difficulty – which it was not.
The investigation
is understood to be into the wider market and not just Barclays.
On the day
the Barclays fine was announced Tracey McDermott, the acting director of
enforcement and financial crime at the FSA, said that a "number of other
significant cross-border investigations in this area" were under way
involving other banks. "The action against Barclays should leave firms in
no doubt about the serious consequences of this type of failure," she
said.
At this
week's Treasury select committee, Diamond had said: "I understand that
there will be follow-up criminal investigations on certain individuals. It's
not up to us, but we are certainly not going to stand in the way of it".
The
Barclays chairman, Marcus Agius, is due to appear before MPs on Tuesday.
Meanwhile
the political row over the Libor-rigging scandal looks set to be reignited next
week with the chancellor, George Osborne, reportedly preparing to oppose a
European Union crackdown on bankers' bonuses.
Osborne is
due to attend a finance ministers' meeting on Tuesday at which he is expected
to argue against European proposals for a 1:1 bonus-to-pay ratio intended to
curb excessive City pay deals, according to the Financial Times.
In a
Commons debate on Thursday, Osborne traded insults with Labour's shadow
chancellor, Ed Balls, after the chancellor claimed in an interview with the
Spectator that people working with Gordon Brown under the last Labour
government were "clearly involved" in the Libor scandal. Osborne
claimed the "Brown circle" included Balls and that he had
"questions to answer".
Balls
demanded Osborne provide evidence of his accusation or retract it and
apologise. Balls said the allegation was "utterly false".
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| Under
fire: Barclays former chairman Marcus Agius (right) with former CEO Bob Diamond (centre), and former chief executive John Varley (left) |
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