LONDON (Reuters) - Britain's financial regulator warned Barclays Plc two years ago that its approval of Bob Diamond as chief executive could change if there was an adverse outcome from the Libor interest rate rigging investigation, documents showed.
Andrew Tyrie, the chairman heading a parliamentary inquiry into the Libor scandal at Barclays, said the evidence in the documents was "at variance" with the impression it received from Barclays Chairman Marcus Agius when it quizzed him in July.
The Financial Services Authority (FSA) released documents to Tyrie after a report by his committee indicated the regulator had not raised Libor as a concern at the time it approved Diamond's promotion to CEO.
The regulator said on Wednesday that a September 2010 file note of a meeting between its CEO Hector Sants and Agius, at which the approval of Diamond was discussed, said Sants "stressed that this is an ongoing (Libor) investigation and the FSA's position could change so the board should be aware."
Diamond resigned in July after Barclays was fined over $450 million (277.4 million pounds) for rigging Libor benchmark interest rates.
The Libor inquiry unearthed long-standing criticism by the FSA of Barclays for having an aggressive culture and for taking too many risks.
Lawmakers at the inquiry also accused Diamond, who had long been one of the most high profile and highest paid bankers and who became Barclays CEO at the start of 2011, of misleading them.
The file note, released by Tyrie's Treasury Select Committee, also said Sants told Agius that the regulator's relationship with Diamond had to improve.
"HS (Sants) explained that the relationship with BD (Diamond) had not reached the level of openness, transparency and willingness to air issues with the FSA as is the case with John Varley," it said, referring to Diamond's predecessor as CEO.
It said Agius agreed and would make sure Diamond "steps up" to improve and that Varley would "coach" him to help the relationship.
The note said Agius said "whilst BD (Diamond) is very competitive ... he suspects he will now see him mature and relax given he has now achieved his goal" of becoming CEO.
Barclays declined to comment on the latest documents.
Its new CEO Antony Jenkins has promised to move quickly and boldly to reform culture. Agius resigned over the rate-rigging and will be replaced in November by corporate governance expert David Walker.
(Reporting by Steve Slater; Editing by Matthew Tostevin and Louise Heavens)
Source: http://news.yahoo.com/regulator-had-warned-barclays-approving-diamond-105600692--finance.html
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