Ousted bank head steps aside from Romney fundraiser

By Peter Schroeder - 07/03/12 11:40 AM ET

The head of the British bank Barclays, who stepped down Tuesday amid an interest-rate fixing scandal, will no longer co-host a London fundraiser for Mitt Romney.

Robert Diamond, the former chief executive for Britain's largest bank, was set to help lead a July 27 fundraising dinner for the presumptive GOP nominee. But after stepping down after pressure began to build over the bank's role in a long-running scheme to fix interest rates, he will no longer help raise funds for Romney, according to Andrea Saul, the campaign's spokeswoman.

Instead, the fundraiser, set to occur while Romney is in London for the Olympic Games, will go on without the former chief executive.

"Mr. Diamond decided to step aside as a co-host for the upcoming London reception to focus all his attention on Barclays. We respect his decision," Saul told The Financial Times.

At the end of June, Barclays admitted to long-running efforts to artificially lower its reporting on a key interest rate, agreeing to pay $453 million to settle charges with U.S. and U.K. regulators.

The deal, reached with financial regulators and the Justice Department, settles charges that the bank engaged in "pervasive" attempts to manipulate key interest rates, including the London Interbank Offered Rate (LIBOR), which is what banks in London charge when they lend to one another. Regulators claim the bank for years submitted false reports on its LIBOR borrowing, which would either maximize profits or minimize losses for the bank.

Regulators also charged that Barclays also reported artificially low borrowing rates at the height of the financial crisis, when reporting higher rates would have driven speculation about the bank's strength.

When the settlement was announced, Diamond admitted the bank's actions "fell well short of the standards to which Barclays aspires."

He also announced that top executives would forgo bonuses for the year, but mounting public and political pressure ultimately led to his resignation, along with that of chief operating officer Jerry del Missier.