Market Overview

Barclays CEO Follows Chairman Out the Door


After Barclays (NYSE: BCS) Chairman Marcus Agius resigned his position Monday, CEO Bob Diamond quit on Tuesday amid the rate-fixing scandal.

Agius stepped up yesterday 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.

However, that did not take any pressure off Diamond, with British Labour Party politician John Mann saying 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."

In his resignation statement, Diamond explained that his decision came as a result of "the external pressure [that] has reached a level that risks damaging the franchise – I cannot let that happen. [I am] deeply disappointed that the impression created by the events of last week about what Barclays and its people stand for could not be further from the truth.”

According to the LA Times, Diamond will now face a parliamentary committee panel of enquiry, and he said that he looked forward "to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week, without my leadership in question.”

It remains to be seen if the scandal results in further casualties, though COO Jerry del Missier should probably be updating his resume right about now.

Last week, Barclays was 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. According to the Associated PressThe 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.

That resulted in Agius leaving his job, and releasing 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."

Now Diamond has gone too, leaving Barclays with a very big postition to fill.

On Tuesday morning, Barclays traded at about $10.80, up roughly 4.6 percent.

Follow me @BCallwood.


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