Jerry del Missier, recently appointed chief operating officer of Barclays, has resigned - following the Libor scandal - in a blow to the group's investment banking franchise in the United States, in particular.
Jerry del Missier, recently appointed COO of Barclays, has resigned with immediate effect following the firm’s involvement in Libor-fixing. Del Missier had been co-head of Barclays corporate and investment bank with Rich Ricci before being made COO two weeks ago. Plans for a replacement COO have not been announced.
One source familiar with the firm says del Missier had to go because he would have known that the bank was reporting lower rates to mask the bank’s financial position. Del Missier joined Barclays in 1997 as head of derivatives from Bankers Trust.
Rich Ricci and Jerry del Missier
Rich Ricci, now sole head of the investment bank, is expected to remain at the firm, although sources say he too would have known about the rate fixing. Ricci, along with Diamond, del Missier and finance director Chris Lucas agreed to forego their bonuses when the bank was penalized GBP290 million last week for rigging rates.
Del Missier is also chairman of the board of the Securities Industry and Financial Markets Association (Sifma). It is expected he will be replaced.
This is the latest blow to Barclays’ reputation, particularly in the US. Since acquiring Lehman Brothers’ US business, the British bank had worked itself up the league tables to be a top three player in DCM and in the top six in M&A and ECM. While its US counterparts suffered scandals, Barclays firm footing meant that it had also been gaining momentum in its private wealth management business in the US.
It would be unfortunate for the UK Libor-scandal to stop the firm’s US growth trajectory in its tracks, but it may be inevitable. US investors and clients are already nervous about European counterparty risk because of the sovereign debt crisis. Although the rate fixing took place several years ago, the fall-out now is likely to keep potential clients in the arms of Barclays’ US peers.