LINDA WERTHEIMER, HOST:
In Britain today, parliament continues its hearing on the interest rate scandal at Barclays Bank. This week, several of the bank's top executives resigned, including the chief executive, Bob Diamond. Yesterday, parliamentarians quizzed Diamond for three hours.
NPR's Philip Reeves is in London, where he says outrage is growing.
PHILIP REEVES, BYLINE: Barclays operates in more than 50 countries, but it's headquartered in Britain. The British are very proud of their history as a global financial center. They're taking the misdeeds of Barclays Bank personally.
(SOUNDBITE OF PARLIAMENT SESSION)
PRIME MINISTER DAVID CAMERON: Well, first of all let me say on the substance of the issue, there is no disagreement between us. I mean, this banking scandal is appalling.
REEVES: Prime Minister David Cameron knows the public is angry. He vented his views before parliament yesterday in unusually blunt language.
(SOUNDBITE OF PARLIAMENT SESSION)
CAMERON: It is outrageous, frankly, that homeowners may have paid higher mortgage rates and small businesses may have paid higher interest rates because of spivvy and probably illegal activity in the city. People - people want to know that crime in our banks, crime in our financial services will be pursued and punished like crimes on our streets.
BOB DIAMOND: Well, I have to answer on behalf of Barclays.
UNIDENTIFIED MAN: Did nobody - what kind of firm were you running?
REEVES: When Bob Diamond appeared before Parliament's treasury committee, a few hours after Cameron's remarks, he faced a barrage of hostile questions. The scandal centers on the manipulation by Barclays traders of interbank lending rates underpinning many trillions of transactions worldwide. This conduct recently prompted U.S. and British regulators to hit Barclays with a record fine of nearly half a billion dollars. Diamond was apologetic.
(SOUNDBITE OF PARLIAMENT SESSION)
DIAMOND: That behavior was reprehensible. It was wrong. I'm sorry. I'm disappointed.
REEVES: Diamond said he only knew the full scale of these misdeeds about a month ago. He staunchly defended business practices at Barclays, saying when the bank found out what had happened, it cooperated fully with regulators. He channeled blame towards 14 traders involved, citing emails in which they encouraged each other to rig rates in exchange for bottles of champagne.
(SOUNDBITE OF PARLIAMENT SESSION)
DIAMOND: When I read the emails from those traders, I got physically ill. It's reprehensible behavior. And if you're asking me should those actions be dealt with, absolutely.
REEVES: Diamond, who's American, has long been unpopular in Britain. The British public is struggling with recession. People resent his huge pay and bonuses. The scandal that's engulfed Barclays has turned Diamond into a lightning rod for anger about the general greed and recklessness of the financial industry. Labour Parliamentarian John Mann told Diamond to show some contrition.
(SOUNDBITE OF PARLIAMENT SESSION)
JOHN MANN: To those Barclays staff across the country and the customers who are wondering and emailing me - a vast number said: What do I do with my money? Do I take it out of this rotten, thieving bank? That's what they're asking me.
REEVES: The panel focused on a phone conversation back in 2008 between Diamond and Paul Tucker, a senior official at Britain's central bank, the Bank of England. Committee chair Andrew Tyrie wanted to know if Diamond thought that Tucker signaled that the Bank of England and the then-Labour government might approve if Barclays low-balled its rate so as to avoid the impression that the bank was in bad shape.
(SOUNDBITE OF PARLIAMENT SESSION)
DIAMOND: I didn't believe it was an instruction.
ANDREW TYRIE: So what was it, nod and a wink?
REEVES: Diamond didn't see it that way. Having made little headway, Andrea Leadsom, who used to work at Barclays, tried a very general question.
(SOUNDBITE OF PARLIAMENT SESSION)
ANDREA LEADSOM: Do you live in a parallel universe to the rest of the U.K.?
DIAMOND: Andrea, I'm just going to say it again: The behavior, when it came up - it was between 2005 and 2007 primarily. There were few instances after that. There have been none since the investigation started. Andrea, it's wrong. It's reprehensible. It makes me angry.
REEVES: There was one strange moment when Diamond said he'd like a little love from the panel. He didn't get any. Chairman Tyrie was generally unimpressed by Diamond's performance.
TYRIE: I think, cumulatively, the whole look, the whole package looked somewhat implausible. And if it is plausible, it's only because there's something wrong with the culture at Barclays. And, of course, it's the culture that needs to be put right.
REEVES: This is about more than just the culture at Barclays. Other big banks are also under investigation. Philip Reeves, NPR News, London. Transcript provided by NPR, Copyright NPR.
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