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Bob Diamond
Former CEO of Barclays
CEO of Barclays who resigned in July 2012 when the bank became the first major institution to settle LIBOR manipulation charges, paying $453 million in fines; Diamond claimed he was unaware of the rate-rigging despite internal emails suggesting otherwise
Overview
Robert Edward "Bob" Diamond Jr. (born 1951) is an American banker who served as CEO of Barclays from January 2011 until his resignation in July 2012 in the wake of the LIBOR manipulation scandal. Diamond had previously built Barclays Capital (BarCap) into a major investment banking division and led the acquisition of Lehman Brothers North American operations during the 2008 financial crisis. In June 2012, Barclays became the first major bank to settle charges with U.S. and UK regulators for manipulating the London Interbank Offered Rate (LIBOR), the benchmark interest rate that underpinned an estimated $350 trillion in financial products worldwide. Barclays paid $453 million in fines to the U.S. Department of Justice, the Commodity Futures Trading Commission (CFTC), and the UK Financial Services Authority (FSA). Internal emails and trader communications revealed that Barclays employees had been systematically submitting false LIBOR rates from at least 2005, both to profit from derivatives positions and, during the 2008 financial crisis, to make the bank appear healthier than it was. Diamond resigned on July 3, 2012, one day after being summoned to appear before the UK Parliament Treasury Select Committee. During his testimony, Diamond denied personal involvement in the rate-rigging and claimed that former Bank of England Deputy Governor Paul Tucker had implied that it would be acceptable for Barclays to lower its LIBOR submissions. Tucker denied this characterization. Diamond also faced criticism for his 2011 statement before Parliament that "the time for remorse is over" regarding banking industry behavior, which was seen as emblematic of the lack of accountability in post-crisis finance. No senior Barclays executive was criminally charged in connection with the LIBOR scandal.
Key Affiliations
Controversies & Concerns
Resigned as Barclays CEO in July 2012 after the bank paid $453 million to settle LIBOR manipulation charges with U.S. and UK regulators
Internal communications showed Barclays traders had systematically submitted false LIBOR rates from at least 2005 to profit from derivatives and mask the bank financial health
Claimed before Parliament that Bank of England Deputy Governor Paul Tucker had implied it was acceptable for Barclays to lower its LIBOR submissions; Tucker denied the characterization
His January 2011 statement to Parliament that "the time for remorse is over" regarding banking behavior became a symbol of the industry lack of accountability after the 2008 crisis
Led the acquisition of Lehman Brothers North American operations during the 2008 financial crisis, which was later scrutinized for favorable terms that benefited Barclays at the expense of Lehman creditors
No senior Barclays executive was ever criminally charged for the LIBOR manipulation despite the systematic nature of the fraud
LIBOR manipulation affected an estimated $350 trillion in financial products worldwide, potentially costing borrowers and investors billions in mispriced contracts
Related Investigations (1)
Known Associates & Connections
Marcus Agius
Barclays chairman who resigned alongside Diamond in the LIBOR scandal
Tom Hayes
UBS and Citigroup trader convicted of LIBOR manipulation; the first individual convicted in the scandal that Diamond oversaw at Barclays
Sources & Documentation
4 documented sources from official records, investigations, and reports
CFTC: Order Instituting Proceedings Against Barclays PLC, Barclays Bank PLC, and Barclays Capital Inc.(2012-06-27)
UK Financial Services Authority: Final Notice to Barclays Bank Plc(2012-06-27)
House of Commons Treasury Committee: Fixing LIBOR: Some Preliminary Findings(2012)
Financial Times: The Fall of Bob Diamond(2012-07-04)
Personal Information
- Born
- 1951-07-27
- Birthplace
- Concord, Massachusetts
Education
- •Colby College (B.A., Economics, 1973)
- •University of Connecticut (MBA, 1977)
Key Timeline
1996
Joins Barclays to build BZW into what becomes Barclays Capital (BarCap)
2005
Internal evidence shows Barclays traders begin systematically submitting false LIBOR rates to benefit derivatives positions
2008-09
Leads Barclays acquisition of Lehman Brothers North American operations during the financial crisis
2008-10
During the financial crisis, Barclays submits artificially low LIBOR rates to appear healthier than it is
2011-01
Becomes CEO of Barclays; tells Parliament "the time for remorse is over" regarding banking industry conduct
2012-06-27
Barclays becomes the first major bank to settle LIBOR charges, paying $453 million to the DOJ, CFTC, and UK FSA
2012-07-02
Summoned before UK Parliament Treasury Select Committee; denies personal knowledge of rate manipulation
2012-07-03
Resigns as CEO of Barclays one day after parliamentary testimony