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Barclays CEO, COO resign over interest scam

Barclays bank chief executive Bob Diamond resigned on Tuesday, caving in to political pressure over a rate rigging scandal which may trigger criminal charges and is bringing the city of London into disrepute.

Diamond, high profile and highly paid, faced growing calls to go but it was thought he might save his job and ride out the storm thanks to the resignation of Barclays' chairman Marcus Agius on Monday.

Agius is now expected to step down only after leading the search for a new chief executive to replace Diamond.

The scandal, which might implicate other international banks, concerns manipulation of the Libor and Euribor interest rates.

These benchmark rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money. Libor is a flagship London instrument used throughout the world. Euribor is the eurozone equivalent.

‘Barclays today announces the resignation of Bob Diamond as chief executive and a director of Barclays with immediate effect,’ the bank said in a statement.

US national Diamond added in the statement: ‘The external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen.’

British finance minister George Osborne welcomed Diamond's resignation.

‘I think it's the right decision for Barclays. I think it's the right decision for the country. I hope it's a first step towards a new culture of responsibility in British banking,’ he said.

Diamond was still due to face questions from British lawmakers on Wednesday over the affair which could yet sully some other top names in international banking.

Barclays' share price was up 0.45 per cent at 169.15 pence following the announcement and in early trading on London's benchmark FTSE 100 index.

‘Despite the void Mr Diamond's departure leaves at one of the UK's largest banks, investors seem to be thinking – or at least hoping – that this may draw a line under the issue,’ said Mike McCudden, head of derivatives at trading consultancy Interactive Investor.

Diamond's resignation comes as the bank faced possible criminal prosecution in a scandal that has sullied London's image as a financial centre. Britain’s Serious Fraud Office on Monday announced that it was considering whether it was ‘appropriate and possible to bring criminal prosecutions’ over the issue, adding that it hoped to reach a conclusion within a month.

Jerry Del Missier, chief  operating operation of the bank also resigned.
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