Miliband breaks ranks with call for Barclays resignations

Barclays will struggle to regain its reputation, even if Bob Diamond resigns, following the Libor scandal.
Barclays will struggle to regain its reputation, even if Bob Diamond resigns, following the Libor scandal.
Ian Dunt By

Ed Miliband has become the first British politician to call for resignations at Barclays over the Libor scandal.

The Labour leader's comments will make the position of boss Bob Diamond even more untenable, as he tries to hold on to his job despite intense pressure for him to step down.

"Obviously we need big, big change here," Miliband said.

"Who's going to be able to bring that change, who's going to be able to restore confidence in Barclays, who's going to be able to restore confidence in the system?

"I think it’s very hard to see that being done by the current leadership at Barclays."

The comments come as David Cameron rejects calls for a wider Leveson-style inquiry into the banking sector.

"I think we know what needs to be done, and I think the important thing people want to see is really concrete action," he said as he faced questions at an EU summit in Brussels.

The government insists the Vickers report, which would split bank's riskier 'casino' activities from their retail arm, is the ideal solution to the crisis.

Diamond agreed to appear before the cross-party Treasury committee last night.

"Given the nature of the behaviours uncovered through these investigations, questions of accountability have rightly been raised," Diamond wrote to chairman Andrew Tyrie.

The Barclays boss admitted that forgoing a bonus, paying fines, apologising and disciplining individuals was not enough to restore the bank's reputation after it was found to have manipulated the interbank lending rate Libor.

"We need to work every day to rebuild the trust that has been damaged by these actions and others that have come before them," he wrote.

The scandal is unlikely to stop there. The Serious Fraud Office is now in talks with the FSA and many legal observers are hoping for criminal charges to be brought.

Others expect the twin rows and the ensuing political fallout to make wholesale banking reform irresistible.

Even the Financial Times demanded Diamond's resignation today, in a front page editorial which will make his position next-to impossible.

"Mr Diamond may not have been the top boss at the time, but he was clearly responsible for its hard-driving culture," it reads.

"If he had an ounce of shame he would immediately step down."

Business secretary Cable said the government could potentially prevent Diamond taking up another position.

"There are last resort powers of director disqualification as you know, and we have many hundreds a year who are subject to that action," he told the business, innovation and skills committee.

"If the facts suggested action – and obviously we would be subject to legal advice, this is a legal process – then indeed that could well follow. That certainly is a sanction open to us, yes."

The last time the Barclays boss was in parliament he refused to waive his £8m bonus for 2010 and told MPs the time for contrition was over.

"There was a period of remorse and apology for banks and I think that period needs to be over," he said.

The banking sector was hit by another scandal this morning, with the Financial Services Authority (FSA) concluding lenders mis-sold interest rate swap arrangements (Irsas) on small businesses, thereby landing them with spiralling costs.


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