British parliamentarians have accused former Barclays chief executive Bob Diamond of holding back evidence during a hearing last month over the Libor rate-rigging scandal.

In a report issued on Saturday regarding the manipulation of a key inter-bank interest rate, the cross-party Treasury Select Committee claimed that Diamond offered “highly selective” evidence when he was questioned over the Libor affair.

The committee also accused British regulators of showing serious shortcomings in their failure to stop Barclays manipulating the key Libor interest rate.

“The sustained rigging of a crucial benchmark rate has done great damage to the UK’s reputation. Public trust in banks is at an all-time low,” Andrew Tyrie, the committee’s chairman, said.

“Urgent improvements, both to the way banks are run, and the way they are regulated, is needed if public and market confidence is to be restored.”

These improvements included “higher fines for firms that fail to co-operate with regulators, the need to examine gaps in the criminal law, and a much stronger governance framework at the Bank of England,” Tyrie added.

The report concluded that “there was something deeply wrong with the culture of Barclays.

“Such behaviour would only be possible if the management of the bank turned a blind eye to the culture of the trading floor.”

Barclays has been fined $453m by US and British agencies for feeding false data, which went into calculations of the London interbank offered rate, known as Libor, a market index that influences the costs of many financial instruments, including home mortgages.

Allegations rejected

In evidence to a panel at a hearing in July, US citizen Diamond suggested that a Bank of England executive had encouraged Barclays to manipulate rate data – a charge the bank has denied.

Legislators said they believed they had been misled by Diamond.

“Select committees are entitled to expect candour and frankness from witnesses before them. Mr Diamond’s evidence, at times highly selective, fell well short of the standard that parliament expects, particularly from such an experienced and senior witness,” Tyrie said.

Diamond rejected the committee’s allegations about his testimony and his former bank’s reputation.

“I answered every question that was put to me truthfully, candidly … and based on information available to me,” Diamond said in a statement.

“The picture being presented today of what Barclays stood for under my watch could not be further from the truth. There is no question that the behaviour of a small group of traders related to Libor manipulation was reprehensible and not in keeping with Barclays’ high standards,” he said.

“Barclays, one of the only major UK financial institutions that did not need a rescue from the UK government, is a tremendous institution with an over 300-year tradition of supporting economic growth and the communities in which we live and work.”