Barclays chief Bob Diamond resigns: what happens next?

Barclays' chief executive Bob Diamond has resigned following a scandal over bank employees manipulating an interest rate used by markets and other other lenders.

The bank appears to have been reluctant to allow Mr Diamond to leave, despite fury from the public and politicians over the Libor-fixing scam.

Barclays' Bob Diamond has quit but where's the scandal heading?

On his bike: Barclays' Bob Diamond has quit but where's the scandal heading?

Who will replace him?

Chairman Marcus Agius resigned yesterday, saying "the buck stopped" with him. However, with Mr Diamond's departure, the board has clearly decided that it cannot cope without its two most-senior managers and Mr Agius will return to run the bank temporarily and lead the search for a successor. There will be few candidates as Barclays will want someone with experience at the highest level but who is untarnished by banking scandals of recent years.

Will he go quietly?

Probably not. Mr Diamond's statement (see below) contains no hint of apology and instead blames "external pressure" for forcing him to give up his job. In the past Mr Diamond has never been afraid to defend himself vehmently against criticism and his comments today read more like a vindication of his work than an acknowledgement that things went wrong. George Osborne revealed this morning that the board told him last night that they, not Mr Diamond himself, had decided that he needed to go. Mr Diamond will have opportunity to express his views more fully when he appears before the House of Commons Treasury Select Committee tomorrow. One of the key the questions will concern a conversation he had with the Bank of England's Paul Tucker in 2008. Some reports have suggested that Barclays staff understood that the authorities had sanctioned their attempts to manipulate the rate.

Will other bank chiefs need to quit too?

Royal Bank of Scotland has already been drawn into the Libor-fixing scandal but it has already replaced the management from the period. Other bank bosses will face demands to follow Mr Diamond's lead if they are seen to have presided over staff who were involved in similar scams. At the moment there is no evidence of this.

What about the banking inquiry?

The decision will take some of the pressure off the government to order a full public inquiry into the banks, as demanded by Labour. However, there is still doubt over whether the Parliamentary inquiry announced by the Chancellor yesteray will be effective or enough to satisfy the public.

What did Barclays say?

The bank's statement reads: "Barclays today announces the resignation of Bob Diamond as chief executive and a director of Barclays with immediate effect. Marcus Agius will become full-time chairman and will lead the search for a new chief executive. Marcus will chair the Barclays executive committee pending the appointment of a new chief executive and he will be supported in discharging these responsibilities by Sir Michael Rake, deputy chairman.

"The search for a new chief executive will commence immediately and will consider both internal and external candidates. The businesses will continue to be managed by the existing leadership teams."

What did Bob Diamond say?

The bank also issued a statement from Mr Diamond: "I joined Barclays 16 years ago because I saw an opportunity to build a world class investment banking business.

"Since then, I have had the privilege of working with some of the most talented, client-focused and diligent people that I have ever come across. We built world class businesses together and added our own distinctive chapter to the long and proud history of Barclays.

"My motivation has always been to do what I believed to be in the best interests of Barclays. No decision over that period was as hard as the one that I make now to stand down as chief executive. The external pressure placed on Barclays has reached a level that risks damaging the franchise - I cannot let that happen.

"I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth. I know that each and every one of the people at Barclays works hard every day to serve our customers and clients.

"That is how we support economic growth and the communities in which we live and work. I look forward to fulfilling my obligation to contribute to the Treasury committee's enquiries related to the settlements that Barclays announced last week without my leadership in question.

"I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry."