The bank said that the outgoing Chairman Marcus Agius will now become a full-time Chairman and lead the search for a new CEO.
Diamond, who is due to answer questions to the Treasury Select Committee on Wednesday, said that the “external pressure placed on Barclays has reached a level that risks damaging the franchise – I cannot let that happen.”
Barclays was fined £290 million by UK and US regulators for manipulating the Libor, the rate at which banks lend to each other last week.
Libor and the Euribor are benchmark reference rates that indicate the interest rate that banks charge when lending to each other.
Barclays is now undergoing an audit of its business practices, which includes: a review of past practices that are thought to be “flawed” over the past few years; a published report of its findings; and a new mandatory code of conduct.
“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,” Diamond said.
Diamond confirmed he would still appear at the Treasury Select Committee on Wednesday, saying: “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.”