Barclays Bank chairman to quit in lending rate scandal
LONDON — The chairman of Barclays Bank is set to step down after the group was fined for attempting to manipulate the inter-bank lending rate, the BBC reported on Sunday.
Marcus Agius will announce on Monday that he is to leave his post in the face of public and political fury over the bank’s efforts to distort the rate at which banks lend to each other, according to the BBC.
“Today Mr Agius has told his colleagues on the Barclays board that he will be going,” BBC business editor Robert Peston said.
“It’s not wholly unexpected,” he added. “Mr Agius was first in the firing line as far as shareholders were concerned, they’ve been thinking for some time that Barclays might need a new chairman, he’s been in the job for six years next year.”
Mike Rake, chairman of BT, is favourite to replace the outgoing chairman, Sky News reported.
The broadcaster also claimed that the Barclays board was set to commission an independent inquiry into events.
Business Secretary Vince Cable earlier backed calls for a criminal investigation into bankers involved in the scandal, which cost the bank £290 million ($450 million) in fines.
Traders at the bank are suspected of manipulating the Libor rates, which play a major role in international financial markets and affect businesses and consumers, in order to skew the markets in their favour.
It emerged earlier Sunday that The Royal Bank of Scotland had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice was widespread.
Prime Minister David Cameron on Friday reiterated his intention to bring Barclays chief executive Bob Diamond and others at the bank to account.
“I think he and frankly the whole management team have got some very serious questions to answer,” the British premier said.
“How many people were engaged in this activity, who were they, who was managing them, to whom were they accountable, how much did the management of this company know about what was happening?”
The bank’s actions distorted one of the main indicators of its financial health. Diamond was in charge of Barclays’ investment arm at the time.
British lawmakers are due to question Diamond about the affair on Wednesday.
Adair Turner, head of the regulating Financial Services Authority (FSA), earlier explained to the BBC that the fine was the toughest penalty available and urged for a tightening in the law.
Extracts from an FSA report released on Wednesday showed that Barclays staff mistakenly believed the Bank of England had encouraged them to manipulate the rate, according to the Press Association, Britain’s domestic news agency.
BoE deputy governor Paul Tucker spoke with Barclays in a telephone call in 2008, the details of which apparently became inaccurately transmitted through the bank, the report found.
“As the substance of the telephone conversation was relayed down the chain of command at Barclays, a misunderstanding or miscommunication occurred,” it said.
“This meant that Barclays’ submitters believed mistakenly that they were operating under an instruction from the Bank of England (as conveyed by senior management) to reduce Barclays’ Libor submissions.”
Opposition Labour leader Ed Miliband on Saturday called for a public inquiry into the behaviour of the banking industry.
The scandal is a fresh blow to Britain’s embattled banking sector following massive bailouts paid for by taxpayers.
Cameron also vowed not to let possible fines end up being used by the bank to reduce its annual tax bill.
“These fines should not be reducing the bills of banks they should be reducing the bills of hard-pressed taxpayers and that is how it is going to be,” he said.
Photo AFP/File, Pierre Verdy