By Simon Miller
Former Barclays chief executive Bob Diamond said he felt "physically ill" when he read the emails between staff traders over the fixing of the Libor rate.
Speaking at the Treasury Select Committee today, Diamond said he was only given the documents outlining how rate-setters went about submitting false Libor rates the weekend before the evidence became public.
"I got to some of the emails [between traders] and I got physically ill. When people don't behave they have to leave. We missed it with these people and it was wrong," he commented.
Diamond said the rate-setters were some of Barclay's most senior staff and admitted that "clearly there were risks that no one understood".
He continued: "Behaviour was abhorrent but context is important. Rate-setters have been here 25-30 years. It's a core part of Barclays UK business and is not perceived by industry to be high risk. Audits are focused on where risk is deemed to be highest."
Diamond said that he didn't sit on daily meetings at the trading floor as there was a compliance team checking that the rules were followed. He added:But they didn't [pick up on manipulations]. It was wrong. Traders would know manipulation was illegal. There have been cases where desk supervisors were aware of this. Some have been kept on while investigation is going on... It has been impacted by these 14 traders. It was wrong."
The former chief executive said that there although the manipulation was wrong, it was 14 traders out of "a couple of thousand" and that there would be follow-up criminal investigations into some individuals.
Inevitably, a lot of questions focussed on the phone call with deputy governor of the Bank of England Paul Tucker. In the evidence submitted before the hearing today, it appeared that Tucker may have suggested a change in Barclay's Libor rate after being asked by "senior Whitehall officials" about why the bank's rate was higher than other Libor ratings.
Although Diamond said he didn't believe Tucker had given an instruction to lower Barclays' rate, he noted that former chief operating officer Jerry del Missier - who resigned yesterday - had been "very honest about miscommunication between the BoE down" and he was the person that instructed the change in the Libor rate.
He added: "I can't put myself in Jerry's shoes. The Financial Services Authority cleared Jerry and concluded that it was a misunderstanding."
When pushed as to who the senior Whitehall official was, Diamond said he could only speculate which would not be appropriate and that Ticker had not mentioned who he was referring to although Diamond did note that he, and the then chief executive John Varley had had interactions with former government minister Baroness Shriti Vadera who was involved in the recapitalisation of banks.
Speculation had landed on former government minister Baroness Shriti Vadera who has denied that she was the official.