Barclays has promised a “root and branch” review of its practices and confirmed the resignation of chairman Marcus Agius, following the imposition on the bank by US and UK regulators of fines totalling US$452.5m on 27 June for manipulation of the London Interbank Offered Rate (Libor) (see
Barclays fined S452.5m by US and UK regulators for LIBOR manipulation
Announcing that he would be stepping down Agius, who was appointed chairman in January 2007, said: “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.” An announcement from Barclays added that Agius would remain in his post until “an orderly succession is assured”.
Barclays also pledged an audit of its business practices, to be headed by its senior independent director Michael Rake, who will also take over the position of deputy chairman. The bank said the audit would comprise “a root and branch review of all of the past practices that have been revealed as flawed” and the implications for its practices and culture would be assessed. Barclays’ chief executive officer (CEO), Bob Diamond, said that any resulting recommendations would be implemented in full.
Diamond is due to appear before UK members of parliament on the Treasury Committee on 4 July to answer their questions on the interest rate rigging practices, and Agius will follow a day later. They are likely to be asked whether the Bank of England (BoE) and regulators such as the Financial Services Authority (FSA) had any knowledge of the illegal activities.
In addition to Barclays, more than a dozen other banks are under investigation for possible similar practices by authorities in Europe, North America and Japan, including RBS, HSBC, Citigroup and UBS.
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The country is expected to survive the review, which it must do to retain its place in the European Central Bank’s asset purchase programme.
The bank believes that the battered UK currency, recently only just holding above the US$1.20 level, could be trading at US$1.36 by this time next year.