Diamond resigns amid Libor scandal (From The Oxford Times)

Diamond resigns amid Libor scandal

1:01pm Tuesday 3rd July 2012 in National News © Press Association 2013

The rate-rigging scandal has claimed its most high-profile scalp as Barclays chief executive Bob Diamond ended his controversial reign at the embattled bank.

The American banker, who resigned with immediate effect, bowed to pressure to step down from politicians, shareholders, financial campaigners and former directors.

But analysts warned Mr Diamond, who was with Barclays for 16 years, will be able to "speak more freely" when he appears before MPs on Wednesday now he is no longer at the helm.

The 60-year-old is expected to shed more light on conversations with the Bank of England which led staff to mistakenly believe they were instructed by the central bank to manipulate the Libor, the rate at which banks lend to each other.

Meanwhile, reports claimed Bank Governor Sir Mervyn King and Financial Services Authority chairman Lord Adair Turner encouraged Mr Diamond's exit.

Barclays has been at the centre of a gathering storm over banking ethics after it was last week fined £290 million by UK and US regulators for attempting to fix the key the interbank lending rate. The bank's chief operating officer Jerry del Missier, who was co-president of investment banking arm Barclays Capital at the time of the rate-fixing claims, is reportedly also set to resign but Barclays refused to comment.

Chancellor George Osborne, who on Monday unveiled a parliamentary probe into banking standards, said Mr Diamond made the "right decision" for the bank and for the country. While Labour leader Ed Miliband also backed the departure, he continued to call for a full judicial inquiry into banking culture and accused the Prime Minister of failing to recognise "the gravity and scale of this crisis".

Mr Diamond, who received close to £18 million in pay rewards in 2011, remained defiant in his resignation statement, saying: "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."

Chairman Marcus Agius, who resigned over the affair on Monday, will remain with the bank to lead the search for a new chief executive before stepping down at a later date. Mr Diamond, who was once dubbed the "unacceptable face of banking" by Lord Mandelson, was in charge of Barclays Capital when staff attempted to influence the key interbank lending rate.

Labour former City minister Lord Myners said Mr Diamond's payoff could be up to £30 million. He said: "Defining the payoff is complex because senior executives get paid in multiple ways, but I think the amount of money, if you include his share options, restricted share rights, matching share options, retained bonus, pension, life and medical cover, is probably in the order of £20-£30 million."