Barclays chief executive Bob Diamond has resigned with immediate effect in the wake of the rate-rigging scandal.
The American banker, who has faced mounting calls to step down, said: “The external pressure placed on Barclays has reached a level that risks damaging the franchise. I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth.”
The move comes after Barclays was fined £290 million by UK and US regulators for manipulating the Libor, the rate at which banks lend to each other. Chairman Marcus Agius, who announced his intention to resign over the affair on Monday, will lead the search for a new chief executive immediately, Barclays said.
Mr Diamond, who was once dubbed the “unacceptable face of banking” by Lord Mandelson, showed no sign of stepping down on Monday as he pledged to see an internal review into Barclays’ practices through to implementation.
The 60-year-old, who joined the bank 16 years ago, said: “My motivation has always been to do what I believed to be in the best interests of Barclays. No decision over that period was as hard as the one that I make now to stand down as chief executive.”
Mr Diamond confirmed he would still appear before the Treasury Select Committee on Wednesday to answer questions over the rate-fixing allegations which ultimately led to the Government yesterday launching a parliamentary probe into banking culture.
Mr Agius, who will become full-time chairman until he steps down at an unspecified date, said: “Bob Diamond has made an enormous contribution to Barclays over the last 16 years of distinguished service to the group, building Barclays Investment Bank into one of the leading global investment banks in the world. As chief executive he has led the bank superbly.”
Chancellor George Osborne said Mr Diamond’s resignation was “the right decision for Barclays” and the “right decision for the country”. Mr Osborne said he had been informed of the decision on Monday night.
Labour leader Ed Miliband said: “This was necessary and right. It was clear Bob Diamond was not the man to lead the change that Barclays needed. But this is about more than one man - this is about the culture and practices of the entire banking system, which is why we need an independent, open, judge-led public inquiry.”
Lib Dem peer Lord Oakeshott, who led calls for Mr Diamond to resign in the wake of the scandal, said: “Bob Diamond’s departure is a great day for democracy. He is the symbol of the gambling and greed we must root out of our banking system. We must never again let the rich and powerful in the City or the media get their hands round the windpipe of Government.”