LON­DON-Bar­clays Chief Ex­ec­u­tive Bob Di­a­mond re­signed yes­ter­day, the biggest scalp in a fi­nan­cial mar­kets scan­dal that has ripped through the bank's se­nior man­age­ment and sown the seeds for a new in­ves­ti­ga­tion in­to Britain's bank­ing sec­tor.

Jer­ry del Missier, ap­point­ed on­ly last month as chief op­er­at­ing of­fi­cer, re­signed hours af­ter Di­a­mond left and a day af­ter the chair­man an­nounced he would step down. The bank re­leased doc­u­ments say­ing del Missier was re­spon­si­ble for or­der­ing traders in 2008 to re­port dis­hon­est­ly low bor­row­ing rates be­cause he had mis­tak­en­ly con­clud­ed that the Bank of Eng­land had told Bar­clays to do so.

The Bank of Eng­land de­nies know­ing of any im­pro­pri­ety in British banks' way of set­ting their bor­row­ing rates, but the ques­tion promis­es to dom­i­nate a tes­ti­mo­ny Di­a­mond will make be­fore a UK par­lia­men­tary com­mit­tee on Wednes­day. The ex­ec­u­tives' res­ig­na­tions, ef­fec­tive im­me­di­ate­ly, came a day af­ter Chair­man Mar­cus Ag­ius fell on his sword. Ag­ius will leave the com­pa­ny on­ly af­ter a new chair­man is found and will lead the search for a new chief ex­ec­u­tive. He will take on Di­a­mond's re­spon­si­bil­i­ties un­til a new CEO is ap­point­ed.

Bar­clays' man­age­ment has come un­der fire since the bank was fined US$453 mil­lion last week by US and British reg­u­la­tors for sub­mit­ting false re­ports on in­ter­bank bor­row­ing rates be­tween 2005 and 2009. Much of that ac­tiv­i­ty orig­i­nat­ed from traders in Bar­clays Cap­i­tal, the in­vest­ment bank­ing di­vi­sion which Di­a­mond head­ed at the time.

"The ex­ter­nal pres­sure placed on Bar­clays has reached a lev­el that risks dam­ag­ing the fran­chise-I can­not let that hap­pen," Di­a­mond said Tues­day in the state­ment ac­com­pa­ny­ing his res­ig­na­tion. "I am deeply dis­ap­point­ed that the im­pres­sion cre­at­ed by the events an­nounced last week about what Bar­clays and its peo­ple stand for could not be fur­ther from the truth."

Britain's Se­ri­ous Fraud Of­fice said Mon­day that it would de­cide with­in a month whether to pur­sue crim­i­nal charges in the case. The gov­ern­ment, which has come un­der pres­sure to ini­ti­ate a judge-led in­quiry in­to the sec­tor, al­so an­nounced a par­lia­men­tary com­mit­tee to in­ves­ti­gate what went on and re­port by the end of the year. Bar­clays' share price fin­ished the day 0.8 per cent low­er at 167.05 pence, down from its in­tra­day high of 176.3 pence.

Bar­clays is one of a num­ber of banks which reg­u­lar­ly sub­mit es­ti­mates of what it will cost them to bor­row from oth­er banks. These es­ti­mates feed in­to a cal­cu­la­tion of the Lon­don in­ter­bank of­fered rate (LI­BOR) which is used to de­ter­mine pay­ments from a range of fi­nan­cial con­tracts. The Lon­don rate, and the re­lat­ed Eu­ro­pean in­ter­bank of­fered rate (EU­RI­BOR), are the bench­marks for over US$500 tril­lion in glob­al con­tracts, in­clud­ing loans and mort­gages.

Bar­clays has ad­mit­ted sub­mit­ting low­er than ac­tu­al fig­ures on its in­ter­bank bor­row­ing dur­ing the cred­it cri­sis in 2008. Sev­er­al oth­er glob­al banks are be­ing in­ves­ti­gat­ed in oth­er coun­tries for sim­i­lar ac­tions. As well as fac­ing in­tense me­dia pres­sure, Di­a­mond has seen grow­ing calls for his res­ig­na­tion from the po­lit­i­cal world. Both Deputy Prime Min­is­ter Nick Clegg and op­po­si­tion Labour Par­ty leader Ed Miliband had called for Di­a­mond, a 60-year-old Amer­i­can, to stand down.

De­spite re­sign­ing, Di­a­mond said he would keep an ap­point­ment to tes­ti­fy Wednes­day be­fore the House of Com­mons Trea­sury Com­mit­tee. In ad­vance of that ap­pear­ance, Bar­clays re­it­er­at­ed its claims that it nev­er sought to ma­nip­u­late LI­BOR, al­though some traders did. Many of the traders no longer work for the bank, Bar­clays said. Some of those who re­main have had their bonus pay­ments with­held un­til the in­ves­ti­ga­tion end­ed, it said.

AP