Barclays Bank has promised a ‘root and branch’ review of its practices and confirmed the resignation of its chairman Marcus Agius.
The moves come after the record US$452.5m fine imposed on the bank last week by US and UK regulators for manipulating the London Interbank Offered Rate (Libor).
In a statement announcing his resignation, Agius, who was appointed as Barclays’ chairman in January 2007 and is also the honorary chair of the British Bankers’ Association (BBA) which collates Libor, said: “Last week’s events, evidencing as they do unacceptable standards of behaviour within the bank, have dealt a devastating blow to Barclays’ reputation. The buck stops with me, and I must acknowledge responsibility by standing aside.” The resignation of Agius was correctly predicted by bobsguide last week.
An announcement from Barclays added that Agius would remain in his post until “an orderly succession is assured”.
The bank has also pledged an audit of its business practices, to be headed by its senior independent director Michael Rake, who will also take over the position of deputy chairman. The bank said the audit would comprise of “a root and branch review of all of the past practices that have been revealed as flawed” and the implications for its practices and culture would be assessed. Barclays’ chief executive officer (CEO), Bob Diamond, himself under pressure to resign, said that any resulting recommendations would be implemented in full.
Diamond is due to appear before UK members of parliament on the Treasury Select Committee this week on 4 July to answer their questions about the Libor scam which rigged interest rates in favour of the banks. Agius will appear before the Committee the following day. Both are likely to be asked when the Bank of England (BoE) and regulators such as the Financial Services Authority (FSA) had knowledge of the illegal activities considering that the investigation began back in March.
In addition to Barclays, more than a dozen other banks, such as RBS, HSBC, Citigroup and UBS, are under investigation for similar practices by regulatory authorities in Europe, North America and Japan.