[Debate] Barclays chairman Marcus Agius resigns over rate-rigging scandal

[Riaz K Tayob]

[Will Transparency International take note? These guys make corruption 
in the South look like small change!]


  Barclays chairman Marcus Agius resigns over rate-rigging scandal

Marcus Agius 'truly sorry' for 'devastating blow' to bank's reputation 
as he quits in wake of £290m fine

  * <http://www.facebook.com/dialog/feed?app_id=180444840287&link=http://www.guardian.co.uk/business/2012/jul/02/barclays-chairman-marcus-agius-resigns&display=popup&redirect_uri=http://static-serve.appspot.com/static/facebook-share/callback.html&show_error=false>

  *
    Jill Treanor <http://www.guardian.co.uk/profile/jilltreanor>, City
    editor
  * guardian.co.uk <http://www.guardian.co.uk/>, Monday 2 July 2012
    08.13 BST
  * Comments (92)
    <http://www.guardian.co.uk/business/2012/jul/02/barclays-chairman-marcus-agius-resigns#start-of-comments>



Marcus Agius earned £751,000 a year as Barclays chairman. Photograph: 
Suzanne Plunkett/Reuters

Marcus Agius <http://www.guardian.co.uk/business/marcus-agius> has quit 
as chairman of Barclays <http://www.guardian.co.uk/business/barclay>, 
saying he was "truly sorry" for the interest rate-rigging scandal that 
has dealt a "devastating blow" to the bank's reputation.

But Monday's resignation did not puncture the political pressure on the 
bank with the Labour leader, Ed Miliband, calling on the bank's chief 
executive, Bob Diamond <http://www.guardian.co.uk/business/bob-diamond>, 
to quit and stepped up his efforts to force the government to set up a 
Leveson-style inquiry into banks by bringing forward an amendment in 
parliament.

"I think there needs to be more a more general change of leadership 
including the chief executive, Bob Diamond," Miliband told ITV Daybreak.

The bank put board director Sir Michael Rake 
<http://www.guardian.co.uk/business/2012/jul/01/sir-michael-rake-barclays-chairman>, 
the former top accountant and serial company director, in the new key 
role of deputy chairman to oversee an audit of the bank's business 
practices, the findings of which will be published.

A "zero-tolerance policy" will be adopted against staff who damage the 
bank's reputation and a new code of conduct drawn up, which all staff 
will need to adhere to.

After a wave of political fury 
<http://www.guardian.co.uk/business/2012/jun/28/barclays-boss-bob-diamond-pressure-mounts> 
was unleashed by a record £290m fine 
<http://www.guardian.co.uk/business/2012/jun/27/barclays-chief-bob-diamond-bonus-fine> 
for the bank's attempt to manipulate key interest rates, Agius described 
himself as the "ultimate guardian of the bank's reputation".

He said "last week's events -- evidencing as they do unacceptable 
standards of behaviour within the bank -- have dealt a devastating blow 
to Barclays' reputation. As chairman, I am the ultimate guardian of the 
bank's reputation. Accordingly, the buck stops with me and I must 
acknowledge responsibility by standing aside," Agius said.

Rake is expected to be considered as a candidate to replace Agius in a 
search process that will be led by the former Cadbury boss Sir John 
Sunderland. The search -- from within the existing board members and 
from outside -- will begin immediately and Agius will stay until his 
successor is found. The process may be drawn out as the Financial 
Services Authority, the City regulator, needs to authorise the candidate.

The audit of business practices will be conducted by an external company 
to undertake a "root and branch review" of all the business practices 
since the credit crisis.

"This exercise will be part of a broader programme of activity intended 
to restore Barclays' reputation and we will establish a zero-tolerance 
policy for any actions that harm the reputation of the bank," said Agius.

"I am truly sorry that our customers, clients, employees and 
shareholders have been let down. Barclays is full of hard working, 
talented individuals whose integrity is not in question."

Agius, who earns £751,000 a year, is still expected to appear before MPs 
on the Treasury select committee on Thursday -- the day after Diamond, 
whose role in the interest rate-fixing scandal will take centre stage 
after it emerged he had personally spoken to the Bank of England about 
the rates being set.

The bank's annual report shows that the chairman can receive "potential 
compensation for loss of office" of 12 months' fees. It was not 
immediately clear on Monday morning if any compensation would be paid.

Diamond showed no signs of tendering his own resignation on Monday. 
Instead he expressed his gratitude to Agius. "Marcus has shown a 
remarkable passion for Barclays and its people," Diamond said.

But the pressure on Diamond remained. Liberal Democrat peer Lord 
Oakeshott said: "Bob's still got to go. Barclays simply isn't safe in 
his hands. The board is so hopeless they've just shot the head of the 
firing squad and missed the prisoner."

Gary Greenwood, banks analyst at stockbroker Shore Capital, said Agius's 
departure would "do little to appease the many who see Bob Diamond as 
having primary responsibility".

The bank was fined for attempting to fix interest rates, known as the 
London interbank offered rate (Libor) and the European equivalent, 
Euribor. These are two benchmarks that are the basis for pricing an 
array of financial products, potentially affecting the price at which 
households and businesses borrow money.

The Financial Services Authority fined the bank £59.9m, while in the US 
the department of justice and the Commodities Futures Trading Commission 
also imposed fines, some £230m combined.

The offences took place in two ways. First, from 2005, Barclays traders 
tried to alter rates to help themselves and rival traders. Second, in 
2008 -- when Barclays raised concerns about Libor -- the bank is said to 
have kept rates lower because higher levels might have been 
misinterpreted as suggesting the bank was facing financial difficulties.

At one point, the documents released by the FSA showed that so-called 
submitters of the rates used to calculate Libor believed they were 
operating under the instruction of the Bank of England 
<http://www.guardian.co.uk/business/2012/jun/27/barclays-other-banks-interest-rates-fsa>.

Paul Tucker, the deputy governor of the Bank of England, spoke to 
Diamond at the time although the Bank of England made clear on Sunday it 
had not known about the problems with Libor.

Fourteen Barclays traders in New York, London and Tokyo are implicated 
by the regulators but other banks are still the subject of 
investigations. RBS, for instance, has sacked four traders and up to 20 
banks and financial firms are thought to be co-operating with 
international regulators.

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