Mr. Diamond, who ran Barclays’ investment banking arm when the rigging occurred, will be cross-questioned by a panel of parliamentarians on Wednesday about what exactly happened between 2004 and 2009 when the ruse was under way.
The government has launched a cross-party parliamentary inquiry into the scandal, with Tory Chancellor of the Exchequer George Osborne saying a “culture that had flourished in the age of irresponsibility” among bankers must come to an end. The opposition Labour party is calling for a wider-ranging independent investigation, much like the long-running Leveson inquiry, which is probing standards in the media following a scandal over journalists hacking into cellphone voicemails.
Whatever action the British government takes, more revelations are sure to follow. At least a dozen big banks are being investigated by global authorities – the UK’s Financial Services Authority (FSA) and, in the US, the Commodity Futures Trading Commission and the Department of Justice - over the rigging of the market.
Biggest disaster in recent times
The scandal is the latest hit for a banking system already heavily criticized for its role in the financial crisis. Since the banking crisis of 2008 – when institutions that had issued too many risky loans had to be bailed out to the tune of billions of dollars by taxpayers - banks have been routinely charged with incompetence.