July 8, 2012 / 10:16 AM / in 7 years

UK's Cable urges Barclays to limit Diamond pay-off

LONDON (Reuters) - Barclays (BARC.L) directors should limit any pay-off for the bank’s former chief executive Bob Diamond and prevent another “outrage”, British Business Secretary Vince Cable said on Sunday, conceding that the government cannot block the payments.

Britain's Business Secretary Vince Cable walks out of 10 Downing Street in central London, November 16, 2011. REUTERS/Andrew Winning

Diamond resigned last week amid public anger after Barclays agreed to pay nearly 450 million pounds ($697.8 million) in fines for manipulating a key interest rate.

Newspapers have reported that Diamond could be in line for exit payments of as much as 17 million pounds.

“There isn’t anything government can directly do about it, but I think in view of the shame that has already been heaped on Barclays bank, I would be very surprised if the chairman and the board were to allow another outrage to occur,” Cable told BBC television.

“I would sincerely hope that the board of Barclays will take a fairly strict view about all of this,” Cable added.

Barclays chairman Marcus Agius and another senior executive also quit last week after the bank admitted that its traders had rigged the London Interbank Offered Rate, or Libor, between 2005 and 2009. Libor, the rate that big banks say they borrow from each other, is used to settle interest rates on trillions of dollars of contracts globally.

The scandal has reignited anger in Britain against bankers, who are blamed for a recession the country is struggling to escape.

The Sunday Times reported that Barclays directors are to consider splitting the bank in two. The British newspaper cited insiders as saying the board will examine whether to spin off the investment banking arm from its retail and commercial operations.

The investment bank, previously called Barclays Capital, would be floated in New York, with the rest of the group retaining its London listing.

Barclays declined to comment.

Reporting by Tim Castle and Matt Scuffham; Editing by Erica Billingham

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