English Central Bank "Eased" Diamond Out
Anyone wondering if the reason why Diamond resigned less than 6 hours ago is because he suddenly grew a conscience, will be disappointed. The real reasons are two: on one hand politicians were concerned he would make it public where all the bodies were buried as reported last night, in the process taking down at least half the English political establishment, obviating his departure from the public eye immediately, and, more importantly, as BBC's Robert Peston reports, the English Fed, that "impartial" and "apolitical" institution known as the Bank of England, got involved. From Peston: "I have learned that Bob Diamond's departure was encouraged by the Governor of the Bank of England, Sir Mervyn King, and the chairman of the Financial Services Authority (FSA), Lord Turner."
What persuaded Mr Diamond and his board colleagues that he should resign was an unambiguous message to the bank from Sir Mervyn and Lord Turner that they would be happy of he resigned.
They were unable to force him out, because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable.
However, as a regulated institution, it was impossible for Barclays' board to ignore the revealed wishes of the two most powerful regulators in the City.
"This is a case of the governor getting his way by the inflexion of his eyebrows," said a source.
"It is how it used to happen and it is a good thing that it is happening again".
The message that the Bank of England governor wanted Bob Diamond to go was delivered personally to Barclays' chairman Marcus Agius in a telephone conversation between the two of them yesterday.
All this of course just in case it was still unclear who really calls the shots of what happens in the world...