Barclays’ chairman resigns over rate-fixing scandal
Barclays’ chairman Marcus Agius has announced his resignation after last week’s revelation that the bank had been fined £290m for attempting to manipulate Libor; the rate of interest that banks charge to lend money to each other.
An investigation by the Financial Services Authority (FSA) discovered that Barclays’ traders had lied about the interest rate other banks were charging it for loans.
This would have given the impression that the bank was a better lending risk than it actually was, allowing it to secure a more favourable rate of interest.
“The buck stops with me,” Mr Agius said in a statement.
He will remain as chairman of Barclays until a successor can be appointed and he is due to appear before MPs on the Treasury Committee on Thursday, to answer questions over the scandal.
Mr Agius is also chairman of the British Bankers’ Association (BBA), which is responsible for compiling Libor, although his resignation from Barclays has raised the question of whether he will resign from this position as well.
As the chairman of the BBA is usually also the chairman of a bank, this would seem to be the likely outcome.
He is expected to be succeeded as Barclays’ chairman by senior independent director Sir Michael Rake, who has now been appointed deputy chairman.
Barclays reputation has been severely tarnished by the revelations and the bank is now reviewing its “flawed culture” and business practices.
In a statement it has promised to publish a full report of the review’s findings and says it will introduce a new mandatory code of conduct for all staff.
It also says that it will operate a “zero tolerance policy” to anything that damages its reputation.
The leader of the opposition, Ed Miliband, is calling for a public inquiry into the banking industry and wants criminal charges to be brought against those involved in the rate-fixing scandal.
It has been revealed that around 20 other institutions around the world are also being investigated by regulators in connection with interbank lending rates.
Other UK banks involved in the inquiry include HSBC, and Royal Bank of Scotland.
The scandal has caused Sir Mervyn King, the governor of the Bank of England to call for investment banks to be split from traditional high street, in line with the recommendations made by the Vickers report which was produced followed the financial collapse in 2007.
Chancellor George Osborne has faced claims that he has been pressured by the banking industry into diluting some of the recommendations made in the report.
Sir Mervyn said: ‘I would hope that Parliament would legislate on that as soon as they feel able to do so – all of the Vickers proposals. That is what we need to do to change the structure of the industry.’