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Barclays Chairman Resigns Amid Scandal

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Barclays (NYSE: BCS) Chairman Marcus Agius has resigned his position on Monday in the middle of the bank's rate-fixing scandal.

Agius stepped up and said that "the buck stops with me," before quitting his job and saying that the scandal has dealt a "devastating blow," to the reputation of the bank.

According to Reuters, the news does not take any pressure off CEO Bob Diamond. British Labour Party politician John Mann says that Diamond, "must resign. He's got to go. There is no role for people like him if banking is to be trusted again in this country and if British banking is to restore its tarnished reputation in the world, which of course is of great importance to our economy."

Last Thursday, the Associated Press reported that Barclays had been fined $453 million for rate fixing after emails were made public showing very clearly that Barclays staff knew that they were doing wrong.

The bank was fined for manipulating the London Interbank Offered Rate (LIBOR) between 2005 and 2009. The AP says that the Libor, "is calculated daily by the British Bankers' Association, based on lending rate figures submitted by global banks." However, some members of Barclays staff adjusted those figures to boost profits.

The AP reports that one trader wrote, "As always, any help wd be greatly appreciated."

"I am going 90 altho 91 is what I should be posting," came the reply.

The trader responded: "When I retire and write a book about this business your name will be written in golden letters."

"I would prefer this not be in any book!" came the answer.

While understandable, the email author's desire for privacy turned out to be remarkably naïve as the email is now shared around the world. Even Prime Minister David Cameron spoke out to say that the situation is "extremely serious".

Whether Diamond keeps his job or not remains to be seen. For his part, Agius released a statement saying, "Last week's events - evidencing as they do unacceptable standards of behavior within the bank - have dealt a devastating blow to Barclays reputation... The buck stops with me, and I must acknowledge responsibility by standing aside. I am truly sorry that our customers, clients, employees and shareholders have been let down."

On Monday morning, Barclays traded at about $10.30, down roughly 5 percent.

Follow me @BCallwood.

Posted-In: Associated Press Barclays Bob Diamond LIBORNews Legal Management Global Best of Benzinga

 

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