Barclays scandal: Bob Diamond resigns Even before the financial crisis, rumours flowed that something wasn't quite right with Barclays Capital. 'How could it work where so many commercial banks had failed' and 'Barclays takes too much risk' were frequently heard around the City and most often sounded like jealousy. As the financial crisis arrived and others fell, the rumours ramped up to 'Barclays is hiding its' and 'Barclays is using accounting tricks to hide'. While the warts and all on Libor are plain to see, isn't it ironic that the fall of the man who built it all is based on poor governance and not poor risk-taking? This story is sadly much bigger than Bob Diamond. Corporate governance is about the board setting the standard and we're going to see that weak controls and morals weren't unique to Barclays. Cleaning up the City is likely to mean dragging up a lot more dirt on board malfeasance and membership back a number of years. In many cases these people are gone, but for the City to be cleaned up they can't be allowed to keep their reputations. And we should not forget about the governance of Libor; those who oversaw and didn't speak up on the flaws of this outdated and amateurish measure for the last decade have a lot to answer about an accident that was waiting to happen and repeatedly did. It's not just Bob. 09.24 Nick Clegg and Ed MIliband have added their views: Clegg: "This was the right decision on his part. People will now want us to get on with the inquiry and take further action fast to ensure that people and businesses are protected. Miliband: "This was necessary and right. But this is about more than one man - this is about the culture and practices of the entire banking system, which is why we need an independent, open, judge-led public inquiry. 09.22 Chief Secretary to the Treasury Danny Alexander echoes Chancellor George Osborne and says Bob Diamond's resignation was the "right decision." Of course this doesn't mean that there aren't still very, very serious questions to be answered by the bank and indeed by Mr Diamond before the Treasury Committee tomorrow, and it is very important that those questions are answered and that lessons are learned, as well of course as the Serious Fraud Office's consideration of whether prosecutions are possible in this issue. Of course, I think the bank has decided to do the right thing, the necessary thing, but there are many more questions to answer. 09.21 Labour MP John Mann, a member of the Commons Treasury Committee, has said there should be no question of a pay-off for Bob Diamond and he called on him to repay the "phenomenal" bonuses he had received over the years. At a previous Treasury Committee hearing that I was at, he said that if something major went wrong with the bank he should lose his job and his pension. That is the words of Bob Diamond and I shall certainly ensure they are quoted back to him tomorrow. He can then stick by his words and not accept some huge pay-off, some huge pension. This bank was rotten to its core and he was the man in charge. He should get no pay-off, in fact he should be repaying the bonuses that he and his bank fiddled. 09.18 Telegraph Deputy Editor Benedict Brogan: Osborne says he thinks there was a deal between Gordon Brown and others that allowed bankers to do whatever they liked in exchange for bringing in money for politicians to spend on public services. He said there was no need for a Leveson style independent inquiry because the Vickers report served that function. 09.13 Just wanted to add these words from Bob Diamond on January 12, 2011, at a Treasury Select Committee on the financial crisis: [Responding to suggestions that Barclays Capital, the separate investment bank he used to run, indulged in 'casino capitalism' and 'blackjack']: I resent the fact you refer to it as blackjack. I think it is wrong. I think it is unfair. I think it is a poor choice of words. We have some fantastically strong financial institutions in this country and I think they deserve better. It is not appropriate to talk about casino banking in Barclays Capital. Frankly, the biggest issue is how do we put some of the blame game behind us? There was a period of remorse and apology for banks - that period needs to be over. We need banks to be able to take risk, working with the private sector in the UK. What we need is a dose of confidence; we need to think about what's best for the economy of the UK. In the public's eyes, we are all the same. They see all banks as bad. A Barclays or an HSBC never put their organisations at risk. It's not pleasant for us at Barclays. Banks did make mistakes but we are very proud. 09.07 Kamal Ahmed, Sunday Telegraph Business Editor, says even as late as last night Diamond wanted to stay: 09.02 William Wright, columnist for Financial News: 08.58 There will probably be some red faces at Investec this morning. Yesterday they released a note entitled "Investec urges to Back Bob!" It continued: We urge investors to back Bob, and take full advantage of Barclays" recent share price underperformance. Bob is going nowhere. But we also expect (and demand) more radical action to address a bloated Barcap cost base to get closer to the Group's unrealistic RoE aspirations. This would help to underpin underlying operational performance. Meanwhile, as "unquantifiable" litigation risks are progressively seen to be a multi-bank issue (rather than Barclays-specific), expect Barclays" sharp underperformance to reverse. 08.51 BBC's Joe Lynam: 08.49 Diamond is also still set to appear at a Treasury Select Committee tomorrow. And according to the FT he could reveal embarrassing dealings with regulators. We'll have the latest in our live blog tomorrow. FT adds that Barclays Wealth banker Rich Ricci (above) is "seen as a candidate" to replace Diamond, while chief operating officer Jerry del Missier "could leave." 08.48 We should get some idea of Bob Diamond's severance package later today. That's sure to stir up some anger. Louise Rouse, director of engagement at FairPensions: Now that Barclays has confirmed the resignation of Bob Diamond as CEO details must be provided of any severance payments proposed to be made to him. Remuneration at Barclays has been a source of controversy for the last few years and shareholders would likely regard it as unacceptable if a CEO departing in such circumstances was to receive severance payments. Indeed, Mr Diamond's resignation should not mean that Barclays does not seek to claw back his bonuses received during the years when Libor was being manipulated. 08.44 Chris Adams, from the FT, reacts to the news that chairman Marcus Agius is staying on at the bank to find a new chief executive, just a day after stepping down: Meanwhile, there are tongue-in-cheek tweets from Andrew Clark at The TImes: BBC reporter Michael Millar: And the BBC's Paddy O'Connell: 08.42 Marcus Agius reportedly phoned Chancellor George Osborne last night to tell him that Barclays' board had decided Bob Diamond should go. 08.40 RIchard Bacon, BBC Radio Fivelive presenter, sees the funny side of chairman Marcus Agius quitting Barclays yesterday: 08.32 Gary Greenwood at Shore Capital has welcomed Bob Diamond's decision: In our opinion this is a sensible outcome as Mr Diamond's position at the company had clearly become untenable in the aftermath of the Libor fixing scandal. We said yesterday that the decision by [chairman] Marcus Agius to step down would do little to appease the many who felt Mr Diamond should carry the can for the scandal, and so it appears to have been the case. The question now will be who will come in to replace Mr Diamond and whether further senior heads will roll? While the company says that it will consider internal and external candidates to fill the role of CEO, we believe that it is of paramount importance that an external appointment is made in order to clean up the image of the company. We believe the shares should react positively to this news as Mr Diamond's departure removes one of the key drags on sentiment for the company. 08.29 Barclays' shares have risen 1.1pc this morning. Kamal Ahmed, Sunday Telegraph Business Editor: Here's the bank's share price over the past 10 days: 08.24 Back to Osborne: Will wait to hear DIamond's reasons for stepping down... Long public inquiry [into libor scandal] is not what the public wants. 08.22 BBC Business Editor Robert Peston on BBC Radio 4: Bob Diamond feels he has been hounded out. He would have taken almost all his time focusing on giving evidence to parliament. He doesn't feel he did anything desperately wrong. He was deeply shocked when he discovered the Libor scandal was going on. 08.12 Chancellor George Osborne on Radio 4: We don't want a leaderless Barclays. Bob Diamond has done the right thing for the bank and the country. I hope it's a first step to a new culture of responsibility in British banking. Britain needs Barclays needs to be a strong bank focused on the economy. Has to be part of a change in banking culture. We don't need banking sector reputation tarnished. Libor scandal has opened door on very bad practices in banking. We are in a very different era from a few years ago. I don't think the Bob Diamonds of the world would have resigned a few years ago. There was a pact [between politicians and banks] years ago that said: 'You make lots of money and we will spend it.' Banks are broken. I spend a great deal of time on banking issues... Bankers must be held accountable. 08.10 Just to recap, Barclays was last week fined a total of £290m by British and US regulators for attempted Libor rigging. It was also caught up in the mis-selling of interest rate swaps. 08.10 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. British Prime Minister David Cameron also announced a parliamentary inquiry into the revelations that Barclays traders had lied about the interest rates other banks were charging it for loans. 08.06 In his daily email, Telegraph Head of Business Damian Reece says the move leaves the bank in "disarray": The move leaves the bank in disarray. Diamond is due to appear before the Treasury Select Committee tomorrow and now, free of his executive responsibilities, could prove a sensational witness - including who knew what and when in relation to the Libor scandal at the Bank of England and Financial Services Authority. When Diamond goes down it's fair to assume others could be taken down with him. His resgination brings to an end an extraordinary chapter in the history of Barclays and the City of London. He built Barclays Capital from the ruins of BZW to become one of the world's leading investment banks, catapulting Barclays from a sleepy UK-based lender to a universal bank operating across the globe. 07.59 Bob Diamond has resigned as chief executive of Barclays with immediate effect, bowing to calls to go over the interest rate rigging scandal at the bank. He said in a statement: "No decision over that period was as hard as the one that I make now to stand down as chief executive. The external pressure placed on Barclays has reached a level that risks damaging the franchise - I cannot let that happen. 07.57 Good morning and welcome to a special live blog on the resignation of Bob Diamond.