Barclays (BCS) spent "nearly £100 million" ($157 million) and three years conducting an "exhaustive internal investigation" into its traders and executives' role in manipulating Libor, a key global benchmark interest rate, according to papers prepared by the bank ahead of Chief Executive Officer Bob Diamond's testimony before British lawmakers on Wednesday.
Diamond, who resigned Tuesday, has apologized, and Barclays reiterated the bank's remorse in the document: "These events should never have taken place, and Barclays deeply regrets that they did."
Still, Barclays also found a way to point fingers at the other banks involved in setting and manipulating interest rates: "It [is] ironic that there has been such an intense focus on Barclays alone, caused by our being first to settle in the midst of an industry-wide, global investigation."
Seven other banks are listed but not named in documents made public from Barclays $453 million settlement with U.K. and U.S. regulators. The prepared documents continue to reveal how even top British banking regulators could be implicated in this wide-ranging investigation.>
According to the papers released by Barclays, chief operating officer Jerry del Missier, who also stepped down Tuesday, told members of his bank who provide information on the London Interbank Offered Rate, or Libor, to push the rate down in late October 2008.
Over several confusing paragraphs, del Missier said he independently drew the conclusion to ask members of Barclays to submit artificially low rates to regulators after a conversation with Diamond, who had just wrapped up a phone call with Paul Tucker, the Deputy Governor of the Bank of England, and relayed the conversation to del Missier.
Barclays' top executives at the time suspected that other banks had been submitting artificially low rates at the height of the financial crisis. The documents, however, said that del Missier acted on his own not because of anything said by Diamond or the Bank of England.
In addition to the resignation of Diamond, del Missier and the chairman of the board, Barclays said many traders involved in the Libor manipulation are "no longer with the bank." But Barclays plans to keep these individuals' names confidential, since civil and criminal investigations are ongoing.
Meanwhile, Diamond had been consistently vocal about the need for bank to act responsibly. Speaking at the Fortune Most Powerful Women conference on June 18, Diamond said: "Being a better citizen is critically important to us in financial services today for all kinds of reasons. In order to be effective we need to regain trust in our industry."
It will take Diamond's successor a long time to rebuild the bank's reputations. "This is the start of a long journey. We are determined that we will earn back that trust," Barclays said Tuesday.
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