The lender agreed to pay the penalty in return for settling claims involving the manipulation of the London interbank lending rate, known as Libor, and its equivalent in Europe (Chicago Options: ^REURUSD - news) - Euribor - before and during the financial crisis.
The bank was fined £59.5m - the largest imposed by City watchdog the FSA - and also agreed payments to authorities in the US.
The US Government released email exchanges between staff as part of its findings, including: “We have another big fixing tom[orrow] and with the market move I was hoping we could set [certain] Libors as high as possible."
It said the traders’ requests were frequently accepted by Barclays’ submitters, who emailed responses such as “always happy to help,” “for you, anything,” or “Done…for you big boy,” resulting in false submissions by Barclays.
At the time of the wrongdoing, he was running the so-called 'casino' part of the operation, Barclays Capital.
There is also speculation that Barclays will not be the last bank to pay a penalty under the wider inquiry.
Mr Diamond said: "I am sorry that some people acted in a manner not consistent with our culture and values.
"The events which gave rise to today's resolutions relate to past actions which fell well short of the standards to which Barclays aspires in the conduct of its business.
"Nothing is more important to me than having a strong culture at Barclays."
He added that the bank took prompt action to fix the problems and co-operated extensively with the authorities.
Libor and Euribor reflect the wholesale rates that banks demand to lend to one another overnight.
The FSA said that Libor submissions were reduced due to senior management's concerns about negative media comment as the scale of the financial crisis emerged.
The regulator added that the submissions on Libor and Euribor took into account requests from interest rate derivatives traders, who were motivated by profit and sought to benefit from Barclays' trading positions.
The breaches involved a significant number of employees and occurred over a number of years, the FSA added.
Tracey McDermott, the FSA's acting director of enforcement and financial crime, said: "Barclays' misconduct was serious, widespread and extended over a number of years.
"Making submissions to try to benefit trading positions is wholly unacceptable.
"Barclays' behaviour threatened the integrity of the rates with the risk of serious harm to other market participants."
The bank's share price lost some of its gains made earlier during Wednesday's trading session when news of the penalties emerged.