Diamond Cracks: Here Are The Shocked Reactions
A bottle of Bollinger has brought down Bob. This is just the beginning, because one knows Barclays by definition was not alone. Many, many more banks will emerge, hopefully their bankers were not quite as dumb as Barclays' henchmen to discuss in retainable, email format their plans for interest rate manipulation, although we doubt it. In which case many more executives will fall as all those "conspiracy theorists" over the past 4 years are proven right once again, and as politicians scramble to cover up all loose ends which may expose them as instrumental (and bribed) in the fact that the "market" is once big farce. In the meantime, courtesy of the WSJ, here are the shocked, nay stunned, reactions to Bob Diamond's resignation (whose severance payment, certainly in the millions, is still unknown)
U.K. Chancellor of the Exchequer George Osborne:
Mr. Osborne welcomed Mr. Diamond’s decision to resign and said he hoped it marked a first step toward “a new era of responsibility” in British banking.
Speaking to the British Broadcasting Corp., he said that recent revelations about attempts to rig interbank rates had “in a way opened a door on the very bad practices in banking” that had led to the 2008 financial crisis.
“We need to see a change in the culture of banking and today we saw a step towards that,” Mr. Osborne said. “We are determined to play our part in bringing about this change.”
*Simon Willis, Daniel Stewart & Co investment bank:
“Firstly, we find it difficult, given the dearth of senior banking management talent, [to see] who Bob Diamond’s replacement might be. We believe that it will be harder for Barclays to achieve its growth and ROE targets. At the very least there will be a hiatus period.
“Secondly, the Libor manipulation affair was clearly by no means confined to Barclays. This begs the question which other senior executives in other banks (U.K. and overseas) face being ousted.
“Thirdly, circumstances suggest that a number of people in the regulators — meaning the FSA and the Treasury, as well as the Bank of England — must have known the detail of Libor fixings.”
*Richard Hunter, Head of Equities, Hargreaves Lansdown Stockbrokers:
“The revolving doors at Barclays are working overtime. Discussions at the Treasury Select Committee should throw some light on the internal turmoil at the bank, whilst it remains to be seen whether Barclays will eventually end up with some credit in being the first to hold its hand up over the Libor investigations.
“It is difficult to estimate how much of the news is now priced in to the shares in the absence of more detail. One thing is for certain, namely that the consensus of the shares as a cautious buy has been creaking in recent days.”
*Move Your Money U.K., a campaign to move money out of high street banks:
“It’s only right that Bob Diamond has resigned. Both those who committed these crimes and the executives responsible for overseeing them have to take personal responsibility for the disgraceful behavior of the bank and, where appropriate, face criminal prosecution. However, a couple of ‘fat cats’ falling on their swords must not distract us from the urgent task at hand of reforming our banking system.
“George Osborne has announced a parliamentary inquiry into the Libor fixing scandal. However the inquiry falls well short in terms of both scope and powers of the full judicial inquiry demanded by the New Economics Foundation and supported by Labour.”
*Ian Gordon, asset managers Investec:
“CEO Bob Diamond has resigned. Whereas such an outcome was ultimately expected by many, in the light of Bob’s robust response to the political/media fire-storm over the past few days, the timing will surprise. If there is ‘new news’ to share (whether embarrassing to U.K. regulators or otherwise) Bob can now speak more freely at the Select Committee show-trial tomorrow. More importantly, Barclays must quickly refocus attention onto its attractive organic story and undervalued ‘defensive’ franchise.”
*Gary Greenwood, investment group Shore Capital:
“This is a massive U-turn. I can’t remember anything like this happening before, but ultimately they’ve reached the right decision. [Bob] Diamond was a key drag to sentiment and bowed to ongoing shareholder and political pressure.”
“[Marcus] Agius standing down yesterday looked to some like a dereliction of duty,” the analyst added. “In times of difficulty, you want the chairman to make the tough decisions.”
*Oriel Securities, stockbroking and advisory firm:
“Bob Diamond’s resignation was a surprise, leaving a key management gap and another major uncertainty over the investment case, it said. Oriel said the CEO will still attend the Treasury Select Committee hearing Wednesday and his resignation is likely to make him less inclined to hold back on speaking out about potential FSA or Bank of England failures associated with historic Libor rate manipulation.
*John Cridland, CBI Director-General:
“Bob Diamond has made his own decision that it is the right thing to do to resign as Barclays’ CEO.
“The focus now must be to urgently restore confidence in the banking system. This is vital if Britain’s businesses are to get the banking services they need to grow the economy.”