Post date: Jul 02, 2012 1:39:52 PM
LONDON, ENGLAND, UNITED KINGDOM (ITN) - Barclays Plc Chairman Marcus Agius quit on Monday (July 2), saying an interest rate rigging scandal had dealt "a devastating blow" to the bank's reputation and "the buck stops with me".
Barclays Chairman Marcus Agius quits his post as the interest rate rigging scandal takes its first major scalp and threatens to widen to other banks.
Agius, chairman at Barclays for five-and-a-half years, will stay in his position until a succession plan is in place.
The move may be seen as an attempt to take the heat off Chief Executive Bob Diamond, who along with Agius has faced calls to resign after the bank was last week fined 453 million (USD) by British and U.S. regulators for submitting inaccurate submissions on the Libor interest rate.
"Last week's events - evidencing as they do unacceptable standards of behaviour within the bank - have dealt a devastating blow to Barclays reputation ... the buck stops with me and I must acknowledge responsibility by standing aside," he said in a statement.
"I am truly sorry that our customers, clients, employees and shareholders have been let down," Agius said.
Barclays has admitted that some of its traders attempted to manipulate the setting of the London inter-bank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about 350 trillion USD of derivatives and other financial products.
Barclays has admitted it submitted artificially low estimates of its borrowing costs from late 2007 to May 2009 because it thought rivals were doing the same and its higher submissions made it look troubled.
The scandal threatens to draw in more banks and more than a dozen are being investigated in the long-running global probe by authorities in North America, Europe and Japan. Analysts and bankers expect more big fines.
Barclays - which has sponsored London's bicycle hire scheme to the tune of 25 million pounds (39m USD) - said it would launch an audit of its business practices, led by Michael Rake, its senior independent director who will move up to deputy chairman.
The audit will undertake "a root and branch review of all of the past practices that have been revealed as flawed" and assess implications for its practices and culture.
Diamond and Agius are due to appear before UK lawmakers this week to face a grilling on what they knew about the rigging of rates. Diamond will appear on Wednesday, and Agius was due to appear on Thursday.
Both are likely to be quizzed on what the Bank of England and other regulators knew.
Agius became chairman at the start of 2007 after more than 30 years as an investment banker and then chairman at Lazard.
He is also chairman of the British Bankers' Association, the UK banking lobby group that is also responsible for setting Libor. The BBA chairman is always drawn from one of the banks, so it is likely Agius would leave that position too.
No criminal charges have been filed in the UK as a result of the Libor investigation, but Britain has called in the fraud squad to investigate possible crimes.