Bob Diamond Steps Down Over Barclays Scandal

Bob Diamond, the chief executive of Barclays Bank, stepped down Tuesday over an interest rate-rigging scandal that threatens financial institutions around the globe.

Allister Heath, editor of the London business newspaper City A.M., tells host Aaron Schachter that in addition to Barclays, several as yet un-named financial institutions colluded to manipulate the inter-bank lending rate.

“There’s a mass problem here at the heart of the financial establishment because all of these banks allowed, or failed to control some of their traders who manipulated interest rates,” says Heath. “In the case of Barclays, they manipulated interest rates for financial gain. And they also manipulated interest rates to try and make themselves look safer and sounder.”

Heath predicts that Diamond’s testimony on Wednesday before a parliamentary committee will supply vivid political theater.

“This is going to be the most spectacular bust-up and confrontation between politicians and businessmen that we’ve seen for a very long time,” Heath says.