Diamond

Barclays' $451 million settlement with U.S. and U.K. regulators over the British lender's manipulations of interbank lending rates claimed two more scalps this morning: Chief Executive Officer Robert Diamond fell on his sword ahead of a date with Parliament tomorrow, followed some six hours after by the resignation of Chief Operating Officer Jerry del Missier.

Those sacrifices to the gods of public outrage followed the resignation of Barclays Chairman Marcus Agius yesterday, and moveThe Observerto wonder what will happen if an American bank is formally implicated in the Libor-rigging scandal.

To refresh: Libor is the London Interbank Offered Rate, a benchmark for the interest rates banks pay to borrow from each other in the short-term. Heidi Moore has a handy explainer here; basically, the settlement indicated that Barclays traders sought to manipulate Libor for profit, while senior executives pushed bankers to lower Libor estimates to protect the lender's reputation.

Yves Smith, meanwhile, noticed that American media and politicians reacted mildly to news that Barclays and presumably other banks were rigging rates that affected $10 trillion in loans, and perhaps $800 trillion in derivatives contracts. Bloomberg, at least, has come around: The news organization that doesn't "countenance bank bashing" came out with an editorial yesterday evening arguing "there's something rotten in banking." In the lead of a separate story today, Bloomberg echoed Ms. Smith:

In the U.K., a record fine for Barclays Plc (BARC) has triggered outrage from lawmakers. In the U.S., Wall Street’s defenders in Congress are sticking by the industry, undaunted by the Barclays fine or the trading losses of more than $2 billion at JPMorgan Chase & Co. (JPM)

American banks, of course, are believed to be in play in rate-rigging inquiries. Citigroup announced a $50 million charge against earnings in February, after Japanese regulators discovered that two former employees of the bank tried to manipulate the Tokyo Interbank Offered Rate, or Tibor. And Bank of America, Citi and JPMorgan are among the U.S. banks named in private lawsuits alleging that lenders colluded to fix interbank rates.

Much about this rate-rigging scandal is unknown, of course. Was Barclays the first to fall because its behavior was the worst, or because it was the most cooperative? Will we find, as Matt Taibbi speculated last month, “that the world’s most powerful banks have, for years, been fixing the prices of almost every adjustable-rate vehicle on earth”...and if that's the case, what then?

We noted last week amid news that Royal Bank of Scotland chief Stephen Hester would forgo his 2012 bonus after technical glitches prevented RBS customers from accessing their accounts, British banking bosses have been quicker to take accountability for poor performance than their counterparts on this side of the Atlantic.

Which leaves us to ponder, What happens to Vikram or Jamie or Brian if their banks cop to a settlement like the one Barclays agreed to this week? Would heads roll, our would we bury our heads?