Robert Diamond said the rate issues made him “physically sick.”
LONDON — Robert E. Diamond Jr., former chief executive of Barclays, told a British parliamentary committee Wednesday that the manipulation of global interest rate benchmarks involving 14 traders at the bank had made him ‘‘physically sick.’’
But the banker, who resigned Tuesday, also placed some of the blame for the rate manipulation scandal on regulators.
Diamond, who was born and raised in Concord, Mass., said the bank had raised concerns multiple times with US and British authorities about discrepancies about how Libor — the London interbank offered rate, a measure of how much banks charge each other for loans — was set. The bank was not told to stop the practice, according to Barclays’ documents submitted to the British Parliament.
“A number of banks were posting rates that were significantly below ours that we didn’t think were correct,’’ Diamond told the committee.
‘‘I can’t sit here and say no one in the industry didn’t know about the problems with Libor,’’ he said. ‘‘There was an issue out there, and it should have been dealt with more broadly.’’
Diamond also sought to deflect attention from the bank’s role in the authorities’ continuing investigation, pointing out that other major global financial institutions also had been implicated. US and British regulators, who announced a $450 million settlement with Barclays last week, are investigating the actions of more than 10 large financial institutions, including JPMorgan Chase, UBS, and Citigroup.
The former chief of Barclays, who said he had been notified about the fines and civil penalties just a few days before the settlement was announced, said the bank had been singled out because it was the first to settle.
The agreement with regulators showed that Barclays traders had altered Libor for their own benefit from 2005 to 2009. Senior executives also told employees to suppress the bank’s rate submissions during the three years through 2009, in response to the financial crisis that was pushing borrowing costs for most global financial institutions to record highs.
The committees’ members, some of whom have worked in the financial services industry, including at Barclays, focused on the role of Diamond, who previously led the firm’s investment banking unit.
The 60-year-old executive, who initially appeared nervous giving his testimony, but gradually became more comfortable during the nearly three hours of questioning, batted away questions of his being solely to blame for the scandal.
“I don’t feel personal culpability. What I do feel is a strong sense of responsibility,’’ Diamond said, adding he had made the decision to resign when support from regulators and shareholders for his position at the bank began to wane.
He also implicated the Bank of England, the country’s central bank, and leading British politicians.
During his testimony, Diamond described a phone call he received at the end of October 2008 from Paul Tucker, a high-ranking official at the Bank of England. According to Diamond, Tucker expressed concerns from senior politicians that Barclays had been submitting rates consistently higher than those of its rivals, a sign of relatively poor health.
Diamond then e-mailed Jerry del Missier, a top deputy, about the conversation, saying that Tucker had stated that it ‘‘did not always need to be the case that we appeared as high as we have recently,’’ according to documents released by the bank.
Del Missier, who also resigned Tuesday, subsequently directed employees to keep the submissions lower, or at least in line with rivals. His actions, some regulators say, were owed to a ‘‘miscommunication,’’ rather than instructions from Tucker.
Diamond reiterated that he had not told senior executives to suppress the bank’s Libor submissions. He said he had only been told last month about the activity, which occurred amid the financial crisis.
“I was unaware that Jerry had the impression that Tucker’s phone call was taken as an instruction,’’ he said.
Tucker, a front-runner to take over as governor of the Bank of England, Wednesday made a request to testify to the committee about his role in the Barclays scandal.
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