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Barclays chairman resigns over interest rate manipulation scandal

Marcus Agius becomes the first big casualty of the scandal. His decision comes amid calls for further resignations at the British bank.

July 03, 2012|By Andrew Tangel and Janet Stobart, Los Angeles Times
  • "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,” Barclays Chairman Marcus Agius said in a statement announcing his departure Monday.
"As chairman, I am the ultimate guardian of the bank's reputation.… (Barclays Bank )

NEW YORK — British authorities turned up the heat on Barclays as its chairman, Marcus Agius, became the first big casualty of a scandal involving attempts to manipulate key interest rates.

Agius' resignation Monday came as political and financial observers called for further resignations, starting with that of Bob Diamond, the bank's chief executive.

Lloyds and the Royal Bank of Scotland were also among about 20 major Western banks that have come under investigation by U.S. and British authorities for allegedly trying to manipulate the London interbank offered rate, or LIBOR, a benchmark for interest rates on corporate and consumer loans.

Authorities in the United States and Britain announced last week that Barclays agreed to pay more than $450 million in fines to settle probes into the matter.

British Prime Minister David Cameron said Monday that Barclays management had "serious questions to answer," and that national regulators should use "all powers and means at their disposal to pursue this."

Cameron also told lawmakers of his proposal for an inquiry into the matter. The investigation "will have full access to papers, officials and ministers, including ministers and special advisors from the last government," he said.

Ed Miliband, leader of the opposition Labor Party, opposed the move, demanding instead "a full and open inquiry independent of bankers and independent of politicians," similar to the ongoing phone-hacking investigation led by senior judge Brian Leveson.

The British government's Serious Fraud office, meanwhile, said Monday that it had concluded investigations into "regulatory misbehavior" regarding LIBOR and was "considering whether it is both appropriate and possible to bring criminal prosecutions." The agency said a decision probably would be reached within a month.

To avoid prosecution in the United States, Barclays agreed to pay $450 million in fines to the U.S. Justice Department and the U.S. Commodity Futures Trading Commission, as well as to the British Financial Services Authority.

In a statement announcing his departure, Agius praised colleagues, including Diamond, for steering Barclays through the recent years' financial turmoil.

"But last week's events — evidencing as they do unacceptable standards of behavior within the bank — have dealt a devastating blow to Barclays' reputation," Agius said.

"As chairman, I am the ultimate guardian of the bank's reputation," he went on. "Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside."

Agius will remain in place until a successor is named. Barclays also announced that it would launch an independent audit of the bank's business practices.

andrew.tangel@latimes.com

Tangel reported from New York. Stobart is a news assistant in The Times' London bureau.

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