Conflict & Justice

Bob Diamond Steps Down Over Barclays Scandal

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Bob Diamond resigned as Barclays' chief executive. (Photo: World Economic Forum/Wiki Commons)

Bob Diamond, the chief executive of Barclays Bank, stepped down Tuesday over an interest rate-rigging scandal that threatens financial institutions around the globe.

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Allister Heath, editor of the London business newspaper City A.M., tells host Aaron Schachter that in addition to Barclays, several as yet un-named financial institutions colluded to manipulate the inter-bank lending rate.

"There's a mass problem here at the heart of the financial establishment because all of these banks allowed, or failed to control some of their traders who manipulated interest rates," says Heath. "In the case of Barclays, they manipulated interest rates for financial gain. And they also manipulated interest rates to try and make themselves look safer and sounder."

Heath predicts that Diamond's testimony on Wednesday before a parliamentary committee will supply vivid political theater.

"This is going to be the most spectacular bust-up and confrontation between politicians and businessmen that we've seen for a very long time," Heath says.

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