Overcast 33° Good Evening
Overcast 33° Good Evening

Barclays CEO Diamond resigns amid scandal

Bob Diamond, chief executive of British bank Barclays,

Bob Diamond, chief executive of British bank Barclays, resigned on Tuesday July 3, 2012, caving in to political pressure over a rate rigging scandal which may trigger criminal charges. (June 8, 2011) Photo Credit: AFP/Getty Images

LONDON - Barclays chief executive Bob Diamond resigned Tuesday, the biggest scalp in a financial markets scandal that has ripped through the bank's senior management.

Jerry del Missier, appointed in June as chief operating officer, resigned hours after Diamond left. The bank released documents saying del Missier was responsible for ordering traders in 2008 to report dishonestly low borrowing rates.

The rate at the center of the scandal is called LIBOR, short for London interbank overnight rate. LIBOR is the benchmark most often used to set the interest rate for adjustable-rate mortgages. It is also used to determine interest rates for some credit cards and student loans and for what it costs corporations to borrow money.

American and British regulators fined Barclays $453 million last week for manipulating LIBOR between 2005 and 2009 by submitting false reports of borrowing rates. Other banks, including Citigroup and JPMorgan Chase, are being investigated.

The executives' resignations, effective immediately, came a day after Barclays chairman Marcus Agius fell on his sword. Agius will leave the company only after a new chairman is found and will lead the search for a new chief executive. He will take on Diamond's responsibilities until a new CEO is appointed.

In January last year, Diamond memorably told a House of Commons committee: "There was a period of remorse and apology for banks. I think that period is over."

More news

Sorry to interrupt...

Your first 5 are free

Access to Newsday is free for Optimum customers.

Please enjoy 5 complimentary views to articles, photos, and videos during the next 30 days.