Barclays Canadian COO follows CEO out the door
Published Tuesday, July 3, 2012 6:30AM EDT
Last Updated Tuesday, July 3, 2012 10:34PM EDT
Just hours after Barclays CEO Bob Diamond quit his job Tuesday, the bank's recently-appointed chief operating officer, Canadian Jerry del Missier announced he is leaving too.
In a statement posted on the Barclays website, del Missier said his resignation was effective immediately.
"I am grateful for the opportunities that were provided to me and proud of what we achieved,' del Missier wrote of his 15 years at the bank.
"We built one of the premier global investment banks from scratch -- something that we are all very proud of. The firm is as strong today as it ever has been and is incredibly well placed to succeed within the post financial reform competitive landscape."
Earlier Tuesday, 60-year-old American Diamond announced his resignation too. The moves come a day after Barclays chairman Marcus Agius said he will also be leaving the company, but not before he has found a replacement for himself and Diamond.
The banks' management has been under fire since it was handed a US$453-million fine by British and American regulators last week, for submitting false reports on interbank borrowing rates during a four-year span between 2005 and 2009.
"The external pressure placed on Barclays has reached a level that risks damaging the franchise -- I cannot let that happen," Diamond said Tuesday in his own resignation statement. "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth."
In the wake of the admission, Diamond, del Missier and other Barclays executives said they were accepting responsibility and promised to waive any bonuses they would be due in 2012.
As a result -- and in light of Diamond's memo to staff on Monday emphasizing that "it is my responsibility to make sure that it cannot happen again" -- the resignation announcements came as a surprise.
Britain's Chancellor of the Exchequer George Osborne nevertheless welcomed the sudden resignations.
"I think it is the right decision for Barclays, I think it is the right decision for the country," the treasury chief said.
The British government has announced a parliamentary committee will investigate the bank's dealings and report before the end of the year. Barclays' activities are also being probed by Britain's Serious Fraud Office, which said Monday it should know within a month whether criminal charges are warranted.
Diamond is slated to appear before the House of Commons Treasury Committee on Wednesday, where he is expected to be asked for an explanation for the bank's filing of false interest rate reports.
At the heart of the scandal is the so-called LIBOR, or London interbank offered rate that is calculated based on a total of 18 banks' submitted estimates of how much it will cost them to borrow from other banks.
The LIBOR is then used as a benchmark for a broad range of contracts, loans and mortgages that total an estimated $500 trillion worldwide.
Barclays has admitted that it disclosed misleadingly lower figures during the credit crisis in 2007 and 2008.
In a conference call Tuesday, Agius said that del Missier had ordered the bank's submissions lowered, on the basis of a misunderstanding stoked by a note from the Bank of England's then-markets director Paul Tucker and an email Diamond subsequently sent to del Missier and Barclay's CEO at the time, John Varley.
"Tucker stated that the levels of calls he was receiving from Whitehall were 'senior' and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently,” Diamond said in the Oct. 30 email provided by the bank to British lawmakers on Tuesday.
The bank now says Diamond did not believe he had received or issued orders to keep their LIBOR submissions low, but del Missier may not have grasped that at the time.
"As a result of what he believed was a genuine misunderstanding, Jerry was the most senior officer who gave instructions to lower LIBOR rates,” Agius told reporters on the conference call. “That obviously puts him in a very difficult situation."
Diamond has been credited with helping the bank survive that period without resorting to a taxpayer-funded bailout. He's also seen as a key player in turning Barclays Capital into a profit-maker that bought up the remains of Lehman Brothers U.S. operations for $1.35 billion.
Del Missier became co-chief executive of Barclays Capital alongside Rich Ricci after Diamond moved up from that division to become Barclays CEO. The 50-year-old native of Canada had only been appointed to the newly created role of chief operating officer on June 22.