No doubt they'll pay him an obscene leaving bonus
http://www.bbc.co.uk/news/business-18685040
Barclays chief executive Bob Diamond has resigned with immediate effect.
No doubt they'll pay him an obscene leaving bonus
http://www.bbc.co.uk/news/business-18685040
Barclays chief executive Bob Diamond has resigned with immediate effect.
Will be interesting to see him before the Treasury Select Committee tomorrow.... I hope he gives them both barrels.
He is apparently going to give details of arrangements with regulators and the central bank, so should be very interesting.
Tin helmet time at the FSA & BofE
No man is an island, but Barry is
The idea that the CEO of a large bank did not know his bank's actual cost of funds, at the very least on a daily basis, is so absurd that Diamond obviously had to go. The size of his parachute may be determined by what he has to say to the Select Committee, of course.
It is fair to say that "everybody" knew that LIBOR was being "fiddled" in 2008 since the interbank market was effectively not operating at various points.
I've just seen it suggested that Diamond may not give evidence tomorrow - that that was a factor in the resignation - one that would shall we say appeal to George Osborne...who apparently wants Paul Draper, no 2 in the BoE, and the other party to the "conversation", to be protected.
We'll see soon enough
Should have been fired, resignation is the easy way out.
There are 2 sections to this story:
1.The idea that the CEO of a large bank did not know his bank's actual cost of funds, at the very least on a daily basis, is so absurd that Diamond obviously had to go
Of course he knew, and this is the "political" part of the story.
It appears that Barclays were trying to report the "correct" level, whereas their rivals weren't (eg RBS quoted 3.50%, Barcap quoted 4.25%). This in turn made Barclays seem at risk to the market, as they appeared to be paying higher (to fund their book) than others.
So, they brought this to the attention of the regulators, the FSA and the BofE.
But the regulators work on a nudge-and-a-wink system, so I can imagine the conversation went "We thank you for pointing this out, we understand your position, and we expect you to take the appropriate action" .... which is very open to interpretation.
This is why I can see heads rolling at the FSA & BofE if the full story (and tapes) emerge.
2. Traders manipulating Libor to profit on their books.
This is more unaceptable in my mind .... but almost impossible for a Chief Exec to know about, or detect.
We're talking here about 1 or 2 basis points......
(eg RBS quotes 3.13%, UBS quotes 3.14%, Barcap quotes 3.12%)
Who's to say who's right or wrong with these small differences ?
However.... the interest-swap traders either disguised losses or booked profits because of these small differences.
That is false accounting or fraud..... especially if bonuses were paid out on these ficticious profits.
Bobby D was caught between a rock and a hard place in the first instance.
In the second instance, that was almost impossible to detect.
No man is an island, but Barry is
Originally Posted by Bluebirdjones
... Bobby Shaftoe,
eh?
Thank you
I think I see the second point. Of course, trades over one or two basis points will "make more sense" if geared up... which adds another twist to the tale.
Yes, it's not unusual for an interest rate swaps book to be in the region of $20-$50bln.... so a small movement equates a large P&L swing.
No man is an island, but Barry is
This is getting a bit beyond my pay grade.
But this makes sense, I think...
http://hat4uk.wordpress.com/2012/07/...t-unravels-32/
Ah, well ... one thing's for sure ... this particular Diamond AIN'T a jewel in Barclay's crown!
Hmm ...... a tiarra?
... although more likely "ta ra"
to Investors' savings,
by all accounts. [pun intended!]
) ... but, of course - unless you happen to a customer of this once noble English Institution - *they're not meant to be taken too seriously.
Hmm ...
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