Belfast Telegraph

Barclays' board in 'state of denial' over Diamond

By Oliver Wright and James Moore

The board of Barclays was in a "state of denial" about the concerns of Britain's banking regulators about its management under Bob Diamond, the Governor of the Bank of England has said.

Sir Mervyn King said that Barclays' board had been "deeply reluctant" to face up to concerns of the Financial Services Authority.

As a result he decided to call in the chairman of the bank directly and make it clear to him that Mr Diamond had to go.

"It is possible to sail close to the wind once but when it becomes four or five times you have to ask questions of the navigation skills of the captain on the bridge," Sir Mervyn told MPs on the Treasury Select Committee.

"The Barclays board were deeply reluctant to face up to concerns that Lord Turner (head of the Financial Services Authority) had expressed."

Earlier Lord Turner told the committee that prior to Sir Mervyn's conversation he thought he had made it clear to Barclays that the FSA thought Mr Diamond had to leave.