Calls for Barclays boss Bob Diamond to quit after interest rate fix scandal
By Emily Ashton and Rhodri Phillips
Britain exploded in fury over the Barclays Bank rate-fixing scandal last night, triggering a chorus of calls for mega-rich boss Bob Diamond to quit or be fired.
Barclays shares crashed over revelations that bonus-hungry traders fiddled lending rates, cheating millions of customers.
But in a staggering show of defiance Mr Diamond, 60, insisted he was staying put.
The Barclays boss was savaged by politicians, financiers and homeowners yesterday over the bank’s shameful rate-fixing “robbery”.
And last night rumours were rife he may be forced to fall on his sword today.
David Cameron turns up the heat on Barclays: ‘This must go right to the top’
By Jill Treanor and Simon Neville
Barclays’ chief executive, Bob Diamond, is fighting to keep his job after the prime minister said accountability for the bank’s admission that it had manipulated key interest rates should go right to the top of the bank.
In a letter sent to Andrew Tyrie, chairman of the Treasury select committee, Diamond said the bank’s traders who had attempted to rig the rate for their own profit were guilty of “wholly inappropriate behaviour”. He said: “They were operating purely for their own benefit” but insisted the rates they had distorted had not had any impact on ordinary savers and mortgage borrowers. He also promised to claw back bonuses, withhold pay and fire those responsible for the scandal.
However, Diamond’s position will take yet another hit on Friday as the embattled bank is braced for the details of a new mis-selling scandal to be released.
David Cameron’s attack on Barclays – which incurred £290m of fines for its role in fixing rates that affect the cost at which millions of customers can borrow – came as the bank’s shares plunged 15%, wiping almost £4bn off the value of Barclays in its biggest one-day fall since March 2009.
20 more banks were rigging interest rates: British bankers now facing criminal inquiry over scandal that was kept secret for years
By James Chapman, Becky Barrow, Ruth Sunderland and Rob Davies
Hundreds of bankers across three continents are embroiled in the interest-rate fixing scandal that has left Barclays chief executive Bob Diamond fighting to save his job.
As pressure intensified on Britain’s highest paid banking boss to quit, MPs heard a string of other financial institutions across the world were under investigation.
At least 20 banks are believed to be under suspicion, with growing demands for a criminal investigation.
RBS and Lloyds drawn into rate-rigging scandal
By Robert Winnett
Bob Diamond, the chief executive of Barclays, is under pressure to resign after the bank admitted it had conspired to fix global interest rates with David Cameron, the Prime Minister, saying he should take responsibility.
The scandal now threatens to engulf taxpayer-funded Lloyds and RBS, which according to court documents obtained by The Daily Telegraph have also been accused of routinely distorting basic financial data used to set interest rates.
As British banks faced a potential criminal investigation billions were wiped off their value, with shares in Barclays falling by 15.5%. RBS’s share price plunged by more than 10 percent yesterday, wiping more than £2 billion off the value of taxpayers’ stake in the bank.
Executives at HSBC are also being investigated alongside London-based financial firms for their role in the scandal, which is estimated to have cost consumers, investors and businesses £30billion.
Split not for family or scandal, says Murdoch
By Andrew Edgecliffe-Johnson, Emily Steel and David Gelles in New York
Rupert Murdoch’s decision to split the media empire he has led for almost 60 years has nothing to do with a desire to hand it to his children or the UK phone hacking scandal, News Corp’s 81-year-old chairman and chief executive insisted on Thursday.
“This has nothing to do with family succession or anything like that,” he told the Financial Times when asked whether Lachlan, his eldest son, could lead the spun-off publishing company, in which the Murdoch family will have the same 40 per cent voting control as it has in News Corp.
“Yes, as a father, I’d like to see my children [involved], if they want to be. But we’re not holding that position open for Lachlan or anyone else,” he said. He told Fox Business Network it was “highly unlikely” that Lachlan would run the publishing company as he was “very happy” running his own business in Australia.
When asked whether either of his sons would have expanded roles following the split, Mr Murdoch said: “They have to earn it, and they have to want it.” The reputation of James, his second son, had not been hurt by his handling of the hacking scandal, he told CNBC.
FSA close to helping firms hit by interest rate swaps
By Robert Peston
The Financial Services Authority (FSA) is in last minute talks with banks to agree a settlement package for small firms which believe they were wrongly sold interest rate swaps.
According to sources, the plan is for an FSA announcement on Friday about the likely scale of alleged mis-selling and how the banks will provide restitution.
The FSA is expected to be highly critical of the banks’ conduct.
Swaps were often sold to business as protection against interest rate rises.
What the FSA wants to announce is a practical plan to provide restitution as quickly as possible, although that depends on persuading all the banks to join in.
“The discussions are going right to the wire,” said a banker.
What the banks are desperate to avoid, in the words of a senior banker, is “writing a blank cheque, as we have done with PPI compensation”.
The FSA’s plan would be to appoint an independent assessor, to whom businesses could submit their complaints. Small businesses would no longer have to incur the expense and inconvenience of suing their banks.
The idea is that, for legitimate complaints, the assessor would unwind deals without the prohibitive costs normally imposed when a swap deal is cancelled.
In some cases, there would be refunds of large interest bills stemming from the swaps and compensation.
Greene King pulling in the punters
Customers giving up their lavish holidays, new cars and household improvements and seeking consolation in a pint and a meal have driven sales to record levels at pubs and brewing group Greene King.
Pre-tax profits rose 8.6 per cent to £152million on sales up 9.4 per cent to £1.14billion for the year to April. Sales at pubs open for more than a year surged by 4 per cent, with food growing by 17 per cent.
“In difficult times, people look at ways to have fun,” said chief executive Rooney Anand. “A pub is something you can turn to. In the last recession, people drowned their sorrows but now they have food as well.” The shares rose 4½p to 536p.
Last-minute talks hint at possible deal in Europe
By Sam Fleming and Sam Coates in Brussels
Hopes rose last night of emergency intervention to help Italy and Spain after German officials took part in unscheduled talks over ways to quell market turmoil.
Officials from all 17 eurozone governments discussed mechanisms to ease pressure on the two periphery nations, a person familiar with the talks said.
The deliberations were intended to feed into a summit of EU leaders in Brussels that was called to hammer out a blueprint for long-term reform of the single currency.
Mario Monti, the Italian Prime Minister, and Mariano Rajoy, his Spanish counterpart, have been lobbying for action to be taken to pull down bond yields that analysts argue will prove fiscally unsustainable in the longer term.
UK recession even deeper than feared as Scotland stagnates
The UK’s double-dip recession is deeper than first thought, according to figures published yesterday – amid fresh warnings about the economic health of Scotland.
The Office for National Statistics (ONS) said the slump in the economy at the end of 2011 was 0.4 per cent of gross domestic product between October and December, compared with previous estimates of 0.3 per cent.
It said its estimate for January to March remained unchanged at 0.3 per cent, but the two consecutive falls in growth have left the UK in recession.
Economists were warning last night that the economy may still be shrinking as a result of the extra holidays for the Queen’s Diamond Jubilee celebrations.
Meanwhile, in Scotland, a report today from Lloyds TSB concludes that the economy “continues to stagnate” and is struggling to find any momentum in the face of the global slowdown.
In one bright note, however, it suggests that Scotland may be avoiding the same double-dip recession which has afflicted the UK as a whole.
RIM’s massive losses delay new BlackBerry
By James Waterson
Blackberry manufacturer Research in Motion (RIM) last night announced worse-than-expected quarterly losses and said it has been forced to delay the launch of its new operating system until early next year, a potentially devastating setback for the struggling firm. RIM said consumers would have to wait for devices running its next-generation BlackBerry 10 software because the integration of a huge volume of code into the platform had “proven to be more time consuming than anticipated.” Until recently it had maintained that the long-awaited new phones would be available to purchase in late 2012, in time for the crucial Christmas buying period.