THE CHAIRMAN OF Barclays bank, Marcus Agius, has resigned this morning following revelations last week that the bank attempted to manipulate one of the main inter-bank lending rates.
Agius has chaired the bank’s board for the last six years and will remain in his post until a successor is found. The bank became embroiled in controversy last week after it was fined €360 million for attempting to manipulate the Libor inter-bank lending rate.
“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 in a statement released this morning.
Barclay’s was fined after the British financial regulator the Financial Services Authority (FSA) found that had lied about the interest rate other banks were charging it for loans.
If a lower reading was given then it had the effect of giving investors and regulators the impression that Barclays was a better lending risk than it actually was. A higher interest rate could have the effect of inflating the bank’s profits.
The manipulation of the Libor rate has a major role in international financial markets and can affect businesses and consumers, skewing markets in favour of the banks, AFP reports.
Yesterday it emerged that Royal Bank of Scotland (RBS), the owner of troubled Ulster Bank and bailed-out by the British taxpayer, had sacked four traders over their alleged involvement in the affair.
This has raised suspicions that the practice was widespread within the banking industry. The British Prime Minister David Cameron has said that he intends to hold senior management at Barclays to account.
Pressure has been mounting Barclay’s chief executive Bob Diamond who is facing public calls for his resignation but has so far indicated that he will be staying in his post.
Diamond, who was in charge of Barclay’s investment arm at the time the rate manipulation occurred, and Agius are due to give evidence to MPs investigating the scandal later this week.
The bank has pledged to undertake a “root and branch review” of all past practice, publish a report on its findings and produce a new code of conduct across the bank.
Bank of England head Mervyn King on Friday said Britain’s banks needed a “real change in culture” following the series of scandals which included the FSA reaching an agreement with Barclays, HSBC, Lloyds and RBS to compensate clients for mis-selling interest rate hedging products.
- with reporting from AFP, 2012
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