Yesterday I posted a diary surveying the outlines of the LIBOR scandal: why it its a huge BFD, why it is different from previous banking scandals, why it isn't going away soon, and why it is sure to spread from London to New York.
The bank at the heart of the scandal is Barclays, and although based in London, it is run by an American citizen and former resident of Massachusetts, Bob Diamond.
Or, actually, was run. Diamond resigned in disgrace this morning. But not before he made an ass of himself by threatening the regulators who nailed his bank for rigging LIBOR:
Bob Diamond is threatening to reveal potentially embarrassing details about Barclays’ dealings with regulators if he comes under fire at a parliamentary hearing on Wednesday over the Libor rate-setting scandal ... ‘If he is attacked, he will fight back,’ said one person familiar with preparations for the Treasury select committee hearing.
Barclays is facing a fierce backlash from politicians and some shareholders following its record fine. But the bank believes it has been unfairly singled out for criticism for reaching a settlement while 20 other banks are still embroiled in the probe. According to two people close to Mr Diamond, the Barclays chief executive is furious that he and the bank have been blamed for ‘lowballing’ the rates at which Barclays said it could borrow from rivals at the height of the financial crisis ... Bankers insist the authorities knew these rates were inaccurate but did not object at the time because of fears it could further destabilise already panicked markets.”
The chairman of Barclays resigned yesterday, which means one of Britain's largest companies - is now completely rudderless. Except that, in a "you can't make this stuff up" twist, that disgraced chairman is going to be in charge of looking for Diamond successor.
Behold, the British establishment, panicked
The chairman resigns to save the CEO. The CEO makes a public threat to drag the central bank into the mire. And the previous government. And the Treasury.
Next morning, the CEO resigns and the chairman re-installs himself to "oversee transition". The police, who said they could not prosecute, now say they might.
You have just seen the British establishment operating at a level of panic and indecision on a par with the Norway disaster in 1940. And it is not over.
Right before he resigned
Diamond pulled out of a fund raiser he had planned to host in London for Romney, which Mittens planned to attend in person. The naked, groteseque excess of the event made even the conservative newspaper of record in England, The Telegraph,
gasp:
The price of invitations dwarfs the amounts paid for such fund-raisers in British politics. Each guest must pay between $25,000 (£17,000) and $75,0000 (£50,000) for a seat at the dinner, which will be hosted by Bob Diamond, the chief executive of Barclays.
...
Guests at the dinner, which will take place at an unspecified venue in central London, have been told that they must provide a copy of an American passport.
The party sets the scene for a fight for the support of the most well-heeled Americans based here. To support Obama’s 2008 presidential campaign, Elisabeth Murdoch, the daughter of Rupert Murdoch, and her husband, the public relations executive Matthew Freud, held a fund-raising party at their house in Notting Hill.
They co-hosted the event with Joanna Shields, the former boss of the social networking website Bebo. The shindig reportedly raised more than $400,000 (£268,000) in a single evening.
Obama did not attend, but telephoned during the party to thank the hosts. The Republican son of the former governor of Michigan George Romney needs to sell only six top-price seats at his dinner to raise more money than Obama’s soirée managed.