Barclays’ Diamond to Face UK MPs Wednesday

Bob Diamond

Bob Diamond, the under-fire chief executive of Barclays, is set to face a grilling from British MPs Wednesday over the bank’s role in the developing scandal over setting interbank lending rates.

His appearance in front of the Treasury Select Committee comes amid a growing political storm over Barclays and other banks’ role in the rigging of rates.

Prime Minister David Cameron said Friday that Diamond has “questions to answer” about the manipulation of the London interbank lending rate, between 2005-09. 

The appearance of media tycoon Rupert Murdoch in front of the equivalent Culture, Media and Sport committee in the wake of the phone hacking scandal created headlines around the world. Murdoch famously said it was the “most humble day” of his life.

Barclays announced on Wednesday that it will pay $453 million in fines to authorities on both sides of the Atlantic for its role in artificially lowering the rates.

Other banks are now under investigation over alleged artificial lowering of the rates, which helped traders profit and may have misled authorities about

The opposition Labour Party has called for a public inquiry into the scandal.

Barclays’ compliance department failed to act on three separate warnings between 2007 and 2008 about conflicts of interest and “patently false” submissions by its staff to the panel which sets Libor rates, the

Andrew Tyrie, the Conservative MP who heads the committee, said in a statement:  "This is the most damaging scam I can recall.The reputation of Britain's financial services industry has been severely tarnished, albeit unfairly for the overwhelming majority unconnected with the scam.”

"The public's trust in banks has been even further eroded.Restoring the reputational damage must begin immediately,” he added.

“Parliament and the public need to know what went wrong and whether the perpetrators have been rooted out. We also need to be given confidence that this has been put right."

Barclays chairman Marcus Agius and other non-executives are expected to appear in front of the select committee on Thursday.