Parliamentary Questions

Diamond stepped down a day after the government announced a parliamentary inquiry into the U.K. banking industry. He is due to be questioned by British lawmakers on the Treasury Select Committee tomorrow.

"There comes a point in time when the board says enough is enough and it became very personal in terms of the criticism," said Christopher Wheeler, a London-based banking analyst at Mediobanca SpA. "It allows the bank to draw a line. The priority now is to find an appropriate chief executive who has not been affected by all this."

"It's the right decision for Barclays," Chancellor of the Exchequer George Osborne told BBC Radio 4 today. "I hope it's the first step towards a new culture of responsibility in British banking."

U.K. and U.S. regulators found Barclays "systematically" attempted to rig the London and euro interbank offered rates for profit. Libor, which is determined by 18 banks' daily estimates of how much it would cost them to borrow from one another for different time frames and in different currencies, is the benchmark for more than $360 trillion of securities, including mortgages, student loans and swaps.

Lehman Deal

Chief Operating Officer Jerry Del Missier is also likely to step down, the Wall Street Journal reported. Diamond, Del Missier and Rich Ricci, who runs corporate and investment banking, will all forgo their bonuses this year.

Diamond ran the London-based bank's securities unit when the Libor manipulation occurred. He lost the contest for the CEO post to John Varley in 2003 and became president of the bank in 2005. He stayed, and by 2007, his Barclays Capital unit accounted for 31 percent of pretax profit. Varley stepped down in 2010, clearing the way for Diamond to replace him.

The Massachusetts-born Boston Red Sox fan and former academic began his career as a lecturer at the University of Connecticut in 1976 and has also held roles at Credit Suisse First Boston in Tokyo and New York and Morgan Stanley.

'Distinctive Chapter'

In 2007, Diamond and Varley lost the takeover battle for ABN Amro Holding NV to a group led by Royal Bank of Scotland Group Plc. The takeover of the Dutch lender eventually forced RBS to seek a government bailout.