Barclays Bank chairman resigns over rate-fixing scandal
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LONDON -- Marcus Agius, chairman of Barclays, one of Britain’s biggest retail and investment banks, resigned Monday after a week of turmoil in which Barclays and other leading banks were revealed to be involved in deceptively fixing the interest rate for interbank lending.
Lloyds and the Royal Bank of Scotland were also among about 20 major Western banks that have come under investigation by U.S. and British authorities for manipulating the London interbank offered rate, or LIBOR, which forms the benchmark for interest rates on corporate and consumer loans.
A Barclays communique acknowledged that it has been fined $450 million by the U.S. Commodity Futures Trading Commission, the Justice Department’s fraud section and Britain’s Financial Services Authority.
In his resignation statement, Agius said that ‘as chairman I am the ultimate guardian of the bank’s reputation. ... The buck stops with me and I must acknowledge responsibility by standing aside.’
He said the past week’s events, ‘evidencing as they do unacceptable standards of behavior within the bank, have dealt a devastating blow to Barclays’ reputation.’
Agius is the first major casualty in the rate-fixing, which was shown to be often influenced by cozy deals with individual traders over LIBOR rates. The scandal has prompted demands from some British financiers and lawmakers for a full inquiry, similar to the probe into media practices after a phone-hacking scandal that has convulsed the News Corp. conglomerate.
Many political and financial observers also are calling for an overhaul of banking practices and ethics as well as further resignations, starting with that of Bob Diamond, Barclays chief executive since February 2011. He is expected to face heavy grilling this week from a parliamentary panel seeking answers about his knowledge and involvement in the bank’s suspicious practices.
In widely broadcast comments last week, Bank of England chief Mervyn King accused Barclays of ‘shoddy treatment of customers ... [and] deceitful manipulation.’
British Prime Minister David Cameron said Barclays management had ‘serious questions to answer,’ and that national regulators should use ‘all powers and means at their disposal to pursue this.’
In his statement, Agius announced that Barclays’ board will ‘undertake a root-and-branch review of all ... past practices that have been revealed as flawed,” and he promised a full report of the findings.
-- Janet Stobart