NEWS
18/08/2012 14:18 BST | Updated 18/08/2012 14:26 BST

Libor Rate-Fixing Scandal: Bob Diamond Hits Back At MPs After Accusations Former Barclays Boss Was 'Selective' With Testimony

Bob Diamond, the former Former Barclays boss who resigned in the wake of revelations about Libor rate-fixing, has hit back at claims he was "highly selective" in his evidence to MPs.

The Treasury Select Committee said Diamond's evidence on the Libor scandal had fallen well short of the standards expected by Parliament.

Diamond: 'I strongly challenge certain assertions about my testimony'

The MPs criticised Diamond as they published the initial findings of a probe into the circumstances surrounding the fixing of the Libor rate, which sets inter-bank lending prices.

In June, Barclays was fined almost £60m for the offence.

On Saturday, Diamond said he was disappointed and strongly disagreed with several of the committee's statements.

"In particular, I strongly challenge certain assertions about my testimony," he said.

"On July 4, I appeared before the Committee voluntarily and on short notice.

"I answered every question that was put to me to me truthfully, candidly and based on information available to me.

"I categorically refute any suggestion to the contrary.

"I take particular issue with the attacks on Barclays' culture and character.

"Barclays, one of the only major UK financial institutions that did not need a rescue from the UK Government, is a tremendous institution with an over 300-year tradition of supporting economic growth and the communities in which we live and work.

"I am proud of what we accomplished over the 16 years I was employed there and our prudent management of the institution helped avoid the fates that befell other UK banks in 2009.

"The picture being presented today of what Barclays stood for under my watch could not be further from the truth.

"There is no question that the behaviour of a small group of traders related to Libor manipulation was reprehensible and not in keeping with Barclays' high standards.

"At the same time, it should be recorded that broader issues with Libor have been a subject of discussion among regulators for years, and there is little dispute that Barclays was both aggressive in its investigation of this matter and engaged in its cooperation with the appropriate authorities.

"Looking forward, it's clear that thoughtful analysis and regulation of issues affecting the banking industry are required and I have no doubt that Barclays is committed to being part of the solution."

In the report, MPs cleared the Bank of England of directing Barclays to artificially lower the Libor rate, but the politicians found the bank was already doing so and it "did not need a nod, a wink or any signal from the Bank of England to lower artificially their Libor submissions".

But both the Bank of England and the Financial Services Authority (FSA) were criticised for failing to spot the manipulation of the Libor rate.

And the MPs found that "it is highly unlikely Barclays was the only bank attempting this".

Publishing the preliminary findings report, committee chairman Andrew Tyrie said: "The Committee has called for action in a number of areas, including: higher fines for firms that fail to cooperate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England.

"The sustained rigging of a crucial benchmark rate has done great damage to the UK's reputation. Public trust in banks is at an all time low.

"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.

"The manipulation was spotted neither by the FSA nor the Bank of England at the time. That doesn't look good.

"Select committees are entitled to expect candour and frankness from witnesses before them. 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."