The head of the select committee inquiry into the Libor rate-rigging scandal has attacked ex-Barclays boss Bob Diamond for giving “highly selective” evidence, as its report was published Saturday.
“Select committees are entitled to expect candour and frankness from witnesses before them,” said Andrew Tyrie, the Conservative MP who chaired the Treasury select committee inquiry which produced the report.
“Mr Diamond’s evidence, at times highly selective, fell well short of the standard that Parliament expects, particularly from such an experienced and senior witness.”
Lawmakers took evidence from Diamond within two days of his resignation as chief executive of the bank in June over the scandal.
In the report, entitled “Fixing Libor: some preliminary findings”, lawmakers called for “urgent improvements” in the way banks were run and regulated.
“Public trust in banks is at an all time low,” Tyrie said. “Urgent improvements, both to the way banks are run, and the way they are regulated, is needed if public and market confidence is to be restored.”
These included “higher fines for firms that fail to co-operate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England,” Tyrie added.
“The sustained rigging of a crucial benchmark rate has done great damage to the UK’s reputation,” Tyrie said.
The report concluded that “the senior management should have known earlier and acted earlier” on concerns over Libor rate fixing.
“There was something deeply wrong with the culture of Barclays,” the report said.
“Such behaviour would only be possible if the management of the bank turned a blind eye to the culture of the trading floor.”
Libor, or London Interbank Offered Rate, is a flagship London instrument used as an interest rate benchmark throughout the world.
The rate affect what banks, businesses and individuals pay to borrow money, while the scandal risks engulfing banks across the world.
Barclays was fined £290 million in June by British and US regulators after admitting it attempted to manipulate the Libor and the related Euribor rates between 2005 and 2009.
The London-listed bank is looking for a new chief executive after US national Diamond quit the post at the start of July along with chairman Marcus Agius and chief operating officer Jerry del Missier.
Commenting on the report, Tyrie added that all the witnesses in front of the inquiry had acknowledged the wrongdoing of rate manipulation at Barclays.
“Every witness who appeared before the Committee agreed that these actions were disgraceful,” Tyrie said.
“They were made possible by a prolonged period of extremely weak internal compliance and board governance at Barclays, as well as a failure of regulatory supervision.
“Such misconduct is a sign of a culture on the trading floor, and higher up, that had gone badly awry.”
However, the report said in its conclusion that “Barclays is just one of many international banks under investigation for possible market manipulation.
“It is important that Barclays’ serious shortcomings should not be seen in isolation from the possible actions of other banks and we await the results of ongoing investigations.”