Barclays boss under massive pressure after interest rate scandal

Barclays boss under massive pressure after interest rate scandal

The dubious dealings of one of london’s leading financial institutions have also reignited the debate about the lack of regulation of players in europe’s largest financial center.

Barclays must pay the record sum of 290 million pounds (around 345 million euros) to financial regulators in the u.S. And the u.K. And to the u.S. Department of justice. The settlement is part of an investigation involving several major banks in europe and the u.S. Among others, deutsche bank is also said to be in the sights of regulators. Barclays shares lost up to 17 percent in phases on thursday. Other bank stocks also fell.

Barclays is said to have tried to influence the so-called libor rate. It indicates the interest rate at which banks lend money to each other. But it is also used as a benchmark for derivatives trading, which moves securities with a book value of well over 300 billion U.S. Dollars – more than the gross domestic product of all the countries in the world. A tiny change in interest rates can trigger huge swings. In addition, barclays has tried to preserve its own creditworthiness in times of financial crisis by keeping the libor rate artificially low.

Several british politicians and economic experts openly called on diamond to take his hat off. "If the barclays board has any backbone at all, throw it out," said liberal democrat financial expert lord matthew oakeshott.

Prime minister david cameron said the entire board has "very serious questions to answer". He is determined "that all the lessons of the scandal are learned," cameron said on the sidelines of the eu summit in brussel. These leaders had to show that they were willing to stand up for their actions. "It’s important that this goes all the way to the top of this organization," cameron added.

Opposition leader ed miliband called for criminal investigation of those responsible. Socialist MP tony baldry said the barclays scandal should "serve as a wake-up call for every individual and every institution in the city of london". "What we are seeing here is robbery," he added. There is a culture of "anything goes and no one knows anything". The board of barclays had already waived its multi-million bonus payments on wednesday, for which diamond had fought bitterly until recently.

The grobbank scandal is just another milestone in the series of misdeeds by leading london bankers. Barclays had already had to pay 500 million pounds to the state in february because the bank had not sufficiently met its tax obligations. The queen even stripped the former chief executive of the royal bank of scotland, fred goodwin, of his knighthood because of his unworthy role during the financial crisis.