Barclays chairman steps down
Barclays chairman Marcus Agius quit today, saying an interest rate rigging scandal had dealt "a devastating blow" to the bank's reputation.
Mr Agius, chairman at Barclays for more than five years, will stay in his position until a succession plan is in place.
The move may be seen as an attempt to take the heat off chief executive Bob Diamond, who along with Mr Agius has faced calls to resign after the bank was last week fined $453 million by British and US regulators for submitting inaccurate submissions on the Libor interest rate.
"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," he said in a statement.
Barclays has admitted that some of its traders attempted to manipulate the setting of the London interbank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about $350 trillion of derivatives and other financial products.
The scandal threatens to draw in more banks and potentially regulators and authorities.
"I am truly sorry that our customers, clients, employees and shareholders have been let down," Mr Agius said.
The bank said it would launch an audit of its business practices, led by Michael Rake, its senior independent director who will move up to deputy chairman.
The audit will undertake "a root and branch review of all of the past practices that have been revealed as flawed" and assess implications for its practices and culture.
Barclays' record fine for rigging Libor interest rates should be a "watershed" moment for the wider financial industry to clean up its act and restore public trust, Britain's markets watchdog said today.
The Libor penalty and last week's news that Britain's top four banks mis-sold interest rate swaps to small businesses compounds the stereotype of a sector that cannot be trusted and left to its own devices, said Tracey McDermott, acting head of enforcement at the Financial Services Authority.
"Instead, it sells products to the wrong people at the wrong time in the wrong way. To change things in the future, to restore that
trust and confidence... requires tough action from the regulator but it's not our job alone," Ms McDermott told an FSA conference.
"Perhaps the reaction to the penalty imposed last week on Barclays will be a watershed moment, the point when the industry realises that it also has to rise to the challenge and to recognise that things have to change," she said.She said Barclays was not an isolated case in the Libor scandal.
The FSA will be scrapped early next year as part of a supervisory shake-up designed to learn lessons from regulatory failings in the run-up to the 2007-09 financial crisis.
Enforcement will handled by the new Financial Conduct Authority (FCA) and its chief executive designate, Martin Wheatley, said the FSA's "credible deterrence" policy of cracking down hard on market abuse would continue.
"We hear critics say we are moving too much towards a nanny state and absolve consumers from their own responsibilities.
It's quite clear from our perspective that is not what we are doing," Mr Wheatley said.
The FCA will have powers to act faster and intervene earlier to ban products - subject to approval from its board - without an initial detailed probe if consumers are being harmed.
"We will not be deterred from taking on and tackling wrongdoing no matter how complex the case," Mr Wheatley told the audience of financial services firms.