Bob’s testimony

With the markets going into low volume summer vacations trading mode, why not spend a few minutes reviewing Diamond’s testimony.

Q263 Mr McFadden: The point that I am making is about how significant the phone call is given the pattern detailed in paragraph after paragraph of the FSA report, which says that you had been consistently lowballing your submissions in the year running up to the phone call.

Bob Diamond: There are two answers to that. First, the behaviour of the people who were influencing the lower submissions is wrong, and we were clear on that from the beginning. To answer that in another way, what was the importance to me of the call from Paul-not the note, but the call? The call from Paul was alerting me that there was concern in Whitehall about why Barclays rates were high. It was important to me to get to John Varley, whom my note was to, so that he could get in touch with Whitehall and make sure that there wasn’t a misunderstanding that Barclays was high or whether other people were posting rates that made us appear to be high and that there wasn’t a function of not being able to get funded. The importance of the call to me was the heads-up about the concerns in Whitehall, who felt that since we were the high LIBOR submission, it might mean something more than it meant or something different than it meant.

Q264 John Mann: Before I ask my questions, I just wonder, Mr Diamond, if you could remind me of the three founding principles of the Quakers who set up Barclays?

Bob Diamond: I can’t, sir.

Q265 John Mann: I can help, and I could offer to tattoo them on your knuckles if you want, because they are honesty, integrity and plain dealing. That is the ethos of this bank that you have spent two hours telling us is doing so well-in fact, from what you have told us, doing so well that I wondered why you had not received an extra bonus rather than the sack.

You have told us that, as I understand what you are saying, it is right that there is a criminal investigation. Some people among the people that you employed may therefore go to prison. You have told us that other banks were doing the same thing. I understand from what you are saying that you are telling us that you never questioned or analysed the rates that were reported between 2005 and 2008 and that you never discussed at a senior level the possibility of your traders misreporting or misrepresenting. Is that accurate?

Bob Diamond: First, in terms of honesty, integrity and plain dealing, that is how I have behaved in my entire career in the business, so I agree with that, and that doesn’t mean that I knew or was aware of the bad behaviour. As soon as I was aware, I did what I could to make sure that it wasn’t there, so if there is an inference that Barclays is anything other than interested in honesty-

Q266 John Mann: In 2005 to 2008, you never questioned, you never analysed and you never asked about any kind of misreporting by anyone in the bank. That is the case, isn’t it?

Bob Diamond: No one was aware of any misreporting.

Full reading here.