Belfast Telegraph

Defiant Diamond a hard nut to crack as he pleads ignorance to Libor furore

By David Elliot

One day you're head of one of the world's most successful banks, the next you're answering questions from a rather large bunch of elected representatives on the first day of an inquiry.

Bob Diamond's appearance in front of the Treasury Select Committee started off as a fairly turgid and predictable affair as the ex-Barclays boss, just over one day into unemployment, issued a seemingly heartfelt apology for the rate-fixing scandal that led to his downfall.

He even looked remorseful and slightly nervous as the chair Andrew Tyrie looked down his nose to ask a few niggly opening questions but there seemed to be enough friendly faces amongst the questioners to settle the jitters. In fact, apart from the chair, the Barclays boss referred to most of the MPs by their first name while they addressed him as 'Mr Diamond'.

One, Jesse Norman, was even a friend of Mr Diamond's from his days working in the investment banking sector and seemed to have moulded his questions from margarine rather than the precious stone from which the Barclays man takes his surname.

But others, thankfully, weren't so kind and were able to penetrate the sort of composure which has been hardened by years knowing that you're making humungous piles of cash every minute of every day.

Labour MP John Mann's question asking Mr Diamond if he knew that his bonus was more than the total amount of money which the UK's largest homeless charity has to work with every year was probably the most destabilising and resulted in yet another answer which certainly didn't relate to the question.

But that was a side issue. At the crux of the day's events was whether the former chief executive knew that traders working for Barclays Capital, the investment banking arm of Barclays, were trying to manipulate the London Interbank Offered Rate (Libor) by reporting false levels to regulators.

"No," said Mr Diamond, claiming he'd only found out about the issue in the last month.

He claims to have felt physically ill when he read e-mails between traders in the process of fixing rates.

But that sheds little light on whether he really was out of the Libor lowballing loop.

If you were cynical, which we've all become in this crumbling banking environment, you could easily suggest that he may have felt ill because the practice had been uncovered, rather then unveiled to him.

But the Barclays boss was adamant that he thought the practice, carried out by the 14 traders already cited, was 'reprehensible' and hugely damaging to the bank that he loved.

The latter phrase is not one you hear very often but Mr Diamond repeated it so many times during the three-hour hearing that his wife must have been a little miffed by the end of it.

And you can believe that he does, or at least did, love Barclays but for someone who came up through the money markets as a trader it seems a little naive to suggest he wouldn't have an inkling that traders under his command weren't pushing the boundaries.

By their very nature traders are risk takers and if there was a way to boost their profit and loss account which merely involved buying a colleague a bottle of Bollinger (the champagne which an attempted rate rigger promised to a conspirator), then you can be sure they'll have at least thought about it.

Having worked in that environment you would have to raise an eyebrow as to why it didn't occur to Mr Diamond that his traders would be up to such shenanigans. Nor that he claims not to have checked Barclays Libor rates against other banks in the daily reports he got from the trading floor.

Not that his knowledge of what was happening matters much now that he and the chief operating officer have already resigned.

Of more importance was Mr Diamond's assertion that BarCap, as Barclays Capital is known, wasn't the only bank trying to manipulate the Libor rate.

He was quick to point out that his bank was probably first on the regulators' list because it had been so co-operative during the investigation and that others who had been on the receiving end of a bottle of Bollinger, seeing the uproar, might not be so quick to come forward.

Mr Diamond is a smooth operator and didn't get to where he was up until Tuesday morning without being cool, calculated and cunning.

But you can't help thinking his actions reveal he's holding back a lot of rage for having to fall on his sword (with a little help from the Bank of England) over the whole issue.

One thing is for sure, there'll be a few more bankers sitting in front of the Treasury Select Committee in the next few months explaining their actions.

And in fact, one, Paul Tucker from the Bank of England, has requested a hearing as soon as possible.

There's no doubt Mr Tucker will have plenty to say about his conversations with Mr Diamond and will shine a light on the relationship between the central bank and the Quaker-founded commercial bank.