Bob Diamond, the chief executive of Barclays, told staff at the bank that he was sorry for, and angry about, the Libor rate-fixing scandal that has plagued his bank and caused his chairman Marcus Agius to stand down.
Mr Diamond said that he would fight to show the bank’s employees and the outside world that the scandal was not representative of the culture of Barclays and they would fire individuals found to have failed to maintain its standards.
He said Barclays was not the only bank to have acted in the way revealed by the regulators although so far it alone has been punished. Barclays was fined a record £290m by UK and US regulators after admitting its traders sought to manipulate the rates which underpin $350tn of contracts around the world.
In his letter to staff, Mr Diamond, who has faced repeated calls from politicians and bank critics to quit, said: “No one is more sorry, disappointed and angry about these events than I am.”
But he said on two occasions in a 1,900-word message that he “loved Barclays” and knew that “these events are not representative of our culture”.
Despite the position he took that these were failures which belonged to the past, he added that it was still necessary to “take appropriate action against those involved”.
An inquiry announced on Monday by David Cameron, the prime minister, will look at whether those people would also become liable to criminal prosecution, although it is unlikely any changes would be retrospective.
Mr Diamond said that Barclays “must evolve our culture to a consistently high standard”, adding: “I have reviewed the actions that I set out above in detail with [Mr Agius] and the other non-executive directors.
“We have their full support, so it is now our responsibility to execute.”
He said: “The financial crisis revealed that banks need to revisit the basis on which they operate, and how they add value to society.
“We know that a small minority have let us down. We also know that we need to rebuild bonds of trust with the society we serve.”
Mr Diamond said: “We will use the output of [an internal review of Barclays’ own conduct led by an independent third party reporting to Sir Michael Rake, senior independent director,] to adjust our HR processes so that the standards that emerge play a material role in hiring and induction; assessment and development; and reward. That will start with executive management.”
Earlier, Mr Agius said the scandal involving price fixing of key interbank lending rates had dealt “a devastating blow” to Barclays as he resigned as chairman of the crisis-hit bank on Monday.
Barclays said it would launch an audit of its business practices following revelations last week that the bank had deliberately submitted low bids to the panel that sets the London interbank offered rate, or Libor, to flatter its financial position.
Mr Agius said: “As chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside.” added
Mr Agius will stay on as chairman until his replacement is found.
Possible successors to Mr Agius, who was appointed chairman in 2006, include Sir Michael, who is also chairman of BT Group and who was promoted to deputy chairman on Monday.
About 20 institutions are under investigation by regulators on three continents in connection with interbank lending rates including HSBC, Royal Bank of Canada and Royal Bank of Scotland.
Mr Agius’s decision is likely to be seen as a move to take some of the pressure off Mr Diamond, who has resisted calls to step down as he prepares to face a grilling by MPs on the Treasury select committee on Wednesday.
It emerged on Sunday that Mr Diamond had in 2008 discussed Barclays’ submissions to the Libor process with Paul Tucker, deputy governor of the Bank of England.
Barclays said that this conversation had been “mistakenly” interpreted by managers as permission to submit artificially low estimates to Libor, which is the reference point for $360tn in contracts worldwide.
Barclays shares – down almost 40 per cent over the past 12 months – rose 3 per cent to 167.7p at 4pm on Monday.
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