LONDON -- Barclays is trying to quickly stem the fallout from a rate-manipulation scandal, as its chief executive, Robert E. Diamond Jr., resigned abruptly Tuesday.
Less than a week ago, the big bank agreed to pay $450 million to settle accusations that it had tried to influence key interest rates for its own benefit, sparking a political firestorm in Britain.
Now, the scandal has claimed three Barclays executives: Diamond; Marcus Agius, the chairman; and Jerry del Missier, who was promoted to chief operating officer last month.
The resignations come as regulators in London and Washington are investigating whether big banks manipulated interest rates to their own advantage, aiming to increase profits and fend off questions about their financial health. Such benchmarks, including the London interbank offered rate, or LIBOR, are essential to setting the lending rates for corporations and consumers. In the Barclays case, regulators accused the bank of lowering its LIBOR submissions to deflect concerns about its high borrowing costs.
While Diamond is stepping down, he will face continued scrutiny Wednesday when he testifies before a British parliamentary committee. Local politicians are expected to question him about the actions within the bank that culminated in multimillion-dollar fines from the Justice Department and the Commodity Futures Trading Commission in the United States and the Financial Services Authority in Britain.
Diamond's resignation, which was effective immediately, came after mounting criticism of the bank's actions from politicians and shareholders.
Diamond's decision to leave was made Monday afternoon in response to this pressure, according to a person with direct knowledge of the matter, who spoke on the condition of anonymity because the discussions were private. Diamond had wanted to avoid prolonging the public focus on the bank's past activities, the person added.
Del Missier resigned as chief operating officer Tuesday with immediate effect. He was the co-president of Barclays Capital, the firm's investment banking unit, from 2005 to 2008, and become co-chief executive of corporate and investment banking at Barclays in 2009.
Agius, who resigned as chairman Monday, will stay at the bank until a new chief executive has been found, and he will then step down, Barclays said in a statement. While the search is under way, he will head the executive committee and will be supported by Michael Rake, the bank's deputy chairman.
Further resignations could be in the works.