Barclays’ chairman Agius resigns over Libor scandal
Marcus Agius, Barclays’ chairman for the past five years, has resigned amid fierce political and shareholder criticism over the bank’s role in attempting to manipulate interbank lending rates, an act that he said has “dealt a devastating blow to Barclays reputation”.
In a statement on Monday, Agius said Barclays’ conduct showed “unacceptable standards of behaviour” and that as chairman: “I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside”.
The UK Financial Services Authority fined Barclays a record £290m last week for attempting to manipulate interbank lending rates between 2005 and 2009. Specifically, Barclays’ misconduct relates to the daily setting of the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).
These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial transactions between banks and other institutions. The FSA and the US Department of Justice are also investigating other banks’ involvement in attempting to manipulate these rates.
Barclays said the search for Agius’ successor, from within the existing board members and from outside, will be spearheaded by non-executive director Sir John Sunderland. Agius will continue as chairman until a successor is found, while Sir Michael Rake has been appointed deputy chairman.
Coupled with Agius’ resignation, Barclays said it was also launching an independent audit of the bank's business practices in an attempt to restore its battered reputation.
The audit has three core objectives: “To undertake a root and branch review of all of the past practices that have been revealed as flawed since the credit crisis started and identify implications for our business practices and culture going forward; to publish a public report of its findings; and to produce a new, mandatory code of conduct that will be applied across Barclays.”
Barclays said the exercise will be part of a “broader programme of activity intended to restore Barclays reputation and we will establish a zero tolerance policy for any actions that harm the reputation of the bank”.
Bob Diamond, Barclays’ embattled CEO, welcomed the audit and said Agius’ decision to resign “deserves all of our respect”. He added: “I am committed to ensuring that the recommendations from this review are implemented in full, as part of a broader programme to continue to build a culture that all of those with a stake in Barclays can be proud of.”
Agius joined Barclays’s board as a non-executive director in 2006 before being appointed chairman in 2007. He joined Barclays from independent investment bank Lazard, where he worked between 1972 and 2006, most recently as chairman of Lazard in London and deputy chairman of Lazard LLC.
Agius was planning on retiring from Barclays next year.