Barclays’ highly paid and controversial chief executive, Bob Diamond, has resigned.
Before he was chief executive he headed up the bank’s investment banking arm, Barclays Capital, which has been associated by investigators with the offences that led to Barclays’ £290m fine.
There were widespread calls for his resignation because the offences took place within his department and on his watch, especially after the bank’s chairman, Marcus Agius, announced his own resignation.
Mr Diamond had already said that he would not take a bonus for this year as a result of the scandal.
It was not the first time the 60-year-old Boston-born former academic – he began his career as a university lecturer – had made the headlines.
Mr Diamond was previously best-known for his huge wealth: last year he topped the list of the highest-paid chief executives in the FTSE 100.
In 2010, Lord Mandelson described him as the “unacceptable face of banking”, saying he had taken a £63m salary for “deal-making and shuffling paper around”.
Barclays dismissed the figure as “total fiction” saying that his salary as head of Barclays Capital was actually £250,000.
BBC business editor Robert Peston said he believed Mr Diamond had earned £6m in 2009 from a long-term incentive scheme and £27m from selling his stake in a Barclays-owned business that had been sold.
He joined Barclays in 1996, having worked in senior positions at Credit Suisse First Boston and Morgan Stanley International.
As the world financial system teetered on the brink in 2008 and 2009, Mr Diamond won accolades for his role in the successful and profitable takeover of the US operations of Lehman Brothers.
The deal – described by Mr Diamond himself as “transformational” – catapulted Barclays into the top league of global investment banks.
He took over as chief executive of Barclays in September 2010.
Barclays set itself apart from its competitors by refusing a British government bank bailout at the height of the credit crunch crisis, arguing that Barclays would make more money if it was not subject to any extra government controls.
Instead, Barclays opted to raise money by selling a large stake in itself to foreign investors (mainly from Qatar, China and Singapore), which boosted the bank’s share price and Mr Diamond’s bonuses.
Those bonuses themselves have become increasingly controversial: there was “no possible justification” for his 2010 award of £6.5m, according to Len McCluskey, general secretary of the Unite union.
This response may be expected from a trade union leader, but shareholders have started to show unease too. This April, nearly 27% of the votes cast at Barclays’ annual general meeting rejected the bank’s remuneration report.
The opposition came despite Mr Diamond’s bonus payments being restructured so that he would only receive half of them unless certain challenging targets for the bank were met.
For many, Mr Diamond compounded his offences when he told MPs last year the time for “remorse and apology” by banks over their role in the financial crisis should end.
But his time at Barclays was finally ended by a scandal at Barclays Capital, for which remorse and apologies were not enough.
He may now have more time to indulge his other interests, which include sports and the arts.
Away from banking, Mr Diamond is a fan of Chelsea and also follows the New England Patriots American football team. He plays golf off a 9.2 handicap.
He also chairs the board of theatre company Old Vic Productions, whose other members include Dame Judi Dench and Billy Elliot director Stephen Daldry.
Last summer saw riots in most major cities across the UK and during the cause of it some of us heard and read about it in all the leading newspapers. It’s been purported that there is alleged reports that it may return again during the summer.
Granted the scale of riots which took place in the 70s-80s was about lack of housing, and the increase of institutionalise racism. When I look back to the banking crisis and how Labour took the action that no other parties would have taken then I say to the masses good For Gordon Brown for showing us how it’s done by recliaming Northern Rock back into public owership. How ironic that the coalition wants to do the opposite.
Recently all the major banks has been a focus of attention House of Commons will be voting on a motion proposed by the Prime Minister to establish a joint committee of the Commons and the Lords to investigate professional standards in the banking industry.
The fact that David Cameron feels sufficiently cornered that he has to propose a motion like this indicates just how low the banks are held in public esteem.
His proposal is a very weak form of inquiry. It does not include within its remit the question of the vast amounts of public money that have been put into private banks. Nor will it consider whether public ownership and control of the banks might be a good idea.
His will be an inquiry of convenience, which he will probably try to turn into an investigation of the actions of the last government, rather than consider any serious proposals for the future.
The position of Ed Miliband and the Labour front bench, of having a Leveson-style inquiry into the banking industry, is likely to bear more fruit and give much greater opportunity for the serious debate that is needed.
Cameron’s personal experience at the hands of Leveson will mean that he won’t wish to repeat that kind of investigation.
At Wednesday’s PMQs there were pretty sparky exchanges between Cameron and Miliband. Amid the hubbub of Tory MPs’ chatter, Miliband reminded the PM that during his entire time in opposition his constant plea had been for less regulation of the banks and financial services in Britain.
But Labour’s policies had their failings too.
The big weakness of Gordon Brown and Alistair Darling’s 2008 bank bailout was that they never challenged the ownership or ethos of banks, merely pumping in money and huge amounts of quantitative easing which enabled them to survive.
It was of course a Labour government that nationalised the Bank of England in 1946, which helped to keep the economy under control. Fifty-odd years later it was one of the first acts of the Blair-Brown government to make the Bank of England independent in line with the independent European Central Bank.
And now we see the private-sector banks exerting undue influence on central banks – a phenomenon which lies at the heart of the problems we now face.
Bob Diamond being hauled before the Treasury select committee is obviously a welcome move. His resignation is even more welcome as it has become apparent that under his leadership, Barclays cleverly avoided part state ownership in 2008 and at the same time manipulated the interbank lending rate to make itself vast profits and enormous bonuses for its executives.
Such financial manipulation, coupled with harsh austerity measures, has brought devastation to many people’s lives.
We have financed the banks, allowing them to continue their appalling practices and forcing the poorest and most vulnerable people across the Europe to pay the price.
In the debates taking place about the future of the welfare state, the left often appears far too defensive.
Obviously it defends the principle of the National Health Service free at the point of use, universal access to benefits and the prevention of destitution – all of which are under threat in almost every European country.
However, many ordinary people are now waking up to the fundamental power structures of society as they view Diamond’s estimated £20 million pay-off and the apparent impunity with which private-sector financial institutions operate.
Many people have tried to move their personal banking arrangements to mutuals such as the Nationwide or the Co-op, which shows people have greater confidence in that form of ownership than the high-pressure sales techniques of Barclays and the other big private-sector banks.
At one time the Labour Party was committed to public accountability and control of the commanding heights of the economy. It supported public ownership of major services and industries.
Over the years, particularly under new Labour, the party retreated from this and under Blair privatisation was promoted.
Peter Mandelson memorably remarked that he was “intensely relaxed” about people getting filthy rich.
Now is the time, more than ever, to call for public ownership and control of the banking system and financial service industries.
Only in this way can there be stability in people’s lives and investment in productive industries and vital services.
As people see their hospital services reducing, as paying off PFI debts takes precedence over patients’ needs, and schools go short of equipment because of the ruinous financial contracts that built new classrooms under PFI, it is pretty obvious that in Britain we have our priorities completely wrong.
The depth of inequality in our society cannot be solved while we allow all political and investment decisions to be made on the basis of the values of the private-sector banks that consider themselves immune from the moral values that the rest of us live by.
The coalition government is attempting to roll back many of the social and regulatory advances of the past 60 years.
On Tuesday afternoon there was a lobby of Parliament by the Construction Safety Campaign in opposition to the deregulation of construction industry cranes.
Liliana Alexa of the Battersea Crane Disaster Action Group delivered a very moving speech.
She lost a loved one in an industrial accident and her talk gave the human dimension to this very important issue.
Others, including Malcolm Davies, the joint convener of the Olympic construction site, pointed out that more have died in construction industry disasters than British soldiers who have lost their lives in Afghanistan and Iraq.
Amid its austerity measures, the government is cutting health and safety inspectors and proposing self-regulation.
This can only result in more deaths and more disasters in all industries. We should be reminded of the “success” of the banking industry’s own self-regulation measures over the past half-century.