Bob Diamond has told MPs he feared Barclays would be nationalised during the credit crisis because of its high borrowing rate.
The former Barclays chief executive appeared before the Treasury Select Committee today to face a grilling on the bank’s manipulation of borrowing rates.
Diamond referred to an "unfortunate series of events" over the last week and the "reprehensible behaviour" of some traders, which he said was not representative of Barclays as a whole.
He said he was worried officials in Whitehall would think the bank was unable to fund itself because of its high cost of borrowing towards the end of 2008.
"If rumours got onto the market that we couldn't fund then there might be a problem with equity raising," Diamond said. He added he shared the concerns of the Bank of England's Paul Tucker that the government might have thought "rates were high and [taken] that to mean we couldn't fund ourselves when in fact we could".
In October 2008 the UK government had been forced to step in and part-nationalise the Royal Bank of Scotland after it became unable to recapitalise itself.
Andrew Tyrie questioned Diamond on whether Barclays chairman Marcus Agius had been placed under pressure from the regulator over Diamond’s role as chief executive, but the former CEO said he was unaware of such a conversation.
Explaining his decision to quit, following an email he sent to staff reiterating his commitment to steer the bank through the LIBOR scandal, Diamond said: “Questions about my leadership have been part of my decision to resign. The best way for me to prevent damage was to step down, but to come before you and answer questions.”
Has been cold-calling consumers
New shares admitted to London Stock Exchange
Slow and steady growth
Missed funding target by £240,000
Denies any wrongdoing