Post date: Jul 10, 2012 3:20:59 PM
Marcus Agius, the man at the top of Barclays when its traders manipulated a global benchmark interest rate, appeared before a hostile panel of lawmakers as part of its investigation into a row that has caused widespread public anger.
Agius was the first Barclays executive to quit when the scandal erupted last week but that was not enough to protect Diamond, who was forced out a day later. Agius has had to stay on to find a successor to Diamond.
Barclays Chief Executive Bob Diamond will forego his bonus amounting to £20 million ($31million dollars) this year, the bank's chairman tells a parliamentary inquiry.
LONDON, ENGLAND, UNITED KINGDOM (JULY 10, 2012) (PARLIAMENT TV) - Barclays chief executive Bob Diamond has agreed to waive bonus awards and shares worth a potential £20 million ($31million), the bank's chairman Marcus Agius told a parliamentary committee on Tuesday (July 10).
"Bob Diamond has voluntarily decided to forgo any deferred consideration and deferred bonuses to which he otherwise would have been entitled to," Agius told the panel, adding the sum would have been worth about 20 million pounds (31 million US dollars).
Diamond, would however receive a year's pay and a cash payment instead of a pension, Agius said.
Barclays has been fined more than $450 million for its part in manipulating the London Interbank Offered Rate, or Libor, the interest rate that underpins transactions worth hundreds of trillions of dollars.
The inquiry read a letter by the regulatory Financial Services Authority (FSA) to Agius, in which it had made a scathing attack on the bank.
Member of parliament Andrew Tyrie read from the letter: "Barclays has a tendency continually to seek advantage from complex structures or favourable regulatory interpretations. These concerns are sufficiently great that I felt it was appropriate to communicate them directly to you and to urge you to encourage a tone of full co-operation and transparency."
In reply, Agius described his bank's relationship with financial regulators as strained.
The inquiry asked Agius if chief executive Diamond lied to the committee last week over concerns of the FSA, but he refused to comment.
One lawmaker said "a great British bank had been dragged through the mud" under the chairmanship of Agius, to which the chairman replied: "I regret deeply what has happened to Barclays. And I have said in my resignation letter, I am truly sorry."
Agius sought to explain how the Libor rates could be manipulated.
"As the credit crisis occurred, the behaviour of Libor departed from its historic patterns and evidently that led to opportunity for risk and for people to take advantage of that. We should have changed our compliance in recognition of that. We were behind the curve and that is most unfortunate. That explains why these things were allowed to happen, why they weren't detected, and why more attention was not brought to our level at an earlier stage. It doesn't excuse any of it," Agius told parliamentarians.
Agius said shareholders had wanted Diamond to stay in the bank.
"We felt our responses proportionate. What we did get wrong quite clearly was the extent of the public opprobrium that then ensued. That took us by surprise. I am quite prepared to accept that. More was needed. That's why we held the board meeting on the Friday night, to hear not the views of the media was, but what the views of our owners, our shareholders was. The view of our owners was that the outcome they did not want to see was for Bob Diamond to go," he said.
Diamond had to resign, Agius said, because he lost the support of financial regulators after the scandal emerged last week.
Barclays is among more than a dozen global banks under investigation by authorities in North America, Europe and Japan and the only one so far to admit wrongdoing.