July 2, 2012 5:49 pm

Miliband steps up pressure on Diamond

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Bob Diamond©Bloomberg

The pressure on Bob Diamond to step down as Barclays chief executive has increased as Labour leader Ed Miliband led calls for a complete overhaul of the bank’s leadership.

Mr Miliband said he doubted that the Barclays boss could provide the leadership the bank required, adding that he did not think that “restoring trust in Britain’s banking can be done by Bob Diamond”.

The Labour leader views Mr Diamond as the embodiment of a culture of irresponsible capitalism – a “predator” rather than a producer – and is not waiting to hear the Barclays chief account for himself in front of MPs on Wednesday.

The episode is reminiscent of Mr Miliband taking the lead in calling for the head of Rebekah Brooks, former News International chief executive, at the height of the hacking scandal.

The Labour leader’s pursuit of Mr Diamond has boxed David Cameron into an awkward position.

The prime minister does not wish to prejudge the Barclays chief’s appearance before the Commons treasury committee but he is anxious not to let Mr Miliband set the agenda by reflecting public anger over the Libor affair.

“It is not for prime ministers to hire and fire bank chiefs,” said Mr Cameron. “He has to make himself accountable to his shareholders and this House. He has some serious questions to answer.”

Downing Street said on Monday the future of Mr Diamond was “a matter for the Barclays board and shareholders”, but gave no suggestion that the prime minister thought the resignation of Marcus Agius as chairman alone was sufficient.

Mr Diamond’s appearance at Westminster on Wednesday is the most eagerly awaited hearing since Rupert Murdoch appeared last year to give evidence over the phone hacking scandal.

But Andrew Tyrie, treasury committee chairman, has told colleagues he will not allow the hearing to turn into a “kangaroo court” and that Mr Diamond should be given a fair chance to answer all questions.

“I want to hear what he has to say – this is absolutely not a court, it is an inquiry,” Mr Tyrie said.

Andrea Leadsom, a former senior Barclays executive in the 1990s and a Tory member of the treasury committee, said she was concerned that an anti-bank frenzy could drive parts of the financial services sector abroad.

But Ms Leadsom told the BBC that Mr Diamond clearly had questions to answer: “I would be amazed if he didn’t know about this.” She added that, in her view, the attempt to manipulate Libor was probably widespread across the industry.

The fallout from the Libor-fixing scandal is likely to be felt in a number of amendments to the financial services bill – a sprawling piece of legislation designed to improve regulation of the City and due to hit the statute book by the end of 2012.

The bill – now in the Lords – will be amended to tighten up sanctions on the manipulation of Libor and it will also be the vehicle for any measures aimed at raising standards of conduct in the City.

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