Marcus Agius has resigned as chairman of Barclays as a result of the Libor interbank lending scandal that emerged last week.
Mr Agius will remain in post until Barclays find a replacement and will appear before a Treasury Select Committee (TSC) on Thursday.
Last week the Financial Services Authority (FSA) and the US Federal Reserve were amongst the regulatory bodies that fined Barclays £290 million for trying to manipulate the Libor rate that is used to set the rate for millions of financial transactions. Libor (London interbank offered rate) is the rate at which banks in London lend money to each other.
Sir John Sutherland, a non-executive director of Barclays will begin the search for a new chairman on Monday.
Sir Michael Rake, a senior independent director at Barclays, has been appointed deputy chairman.
In a statement, Mr Agius said last week’s events “have dealt a devastating blow to Barclays reputation. 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.”
There have been calls from politicians of all sides for Barclays chief executive, Bob Diamond to resign his position but he has said he has no intention of doing so. He will appear before the TSC on Wednesday.
Barclays was fined after the FSA and US regulators found that some of its derivatives traders had lied about the interest rate other banks were charging it for loans. By persuading staff from other banks to give a lower reading than the true rate, Barclays was able to give the impression that it was a better lending risk than was the case in reality.
By reporting a higher reading than the actual real rate, profits could potentially be inflated artificially, which could result in misleading both regulators and investors.
The Libor interbank lending scandal is not just confined to Barclays. It appears likely that other banks will be implicated. Investigations are also being undertaken at Swiss bank, UBS, HSBC, RBS and Citigroup.
In his resignation statement, Mr Agius went on to say: “I am truly sorry that our customers, clients, employees and shareholders have been let down.”
The statement then presents Barclays plan for an audit of its business practices to be undertaken by an independent third party who will report to Rake and a panel of non-executive directors.
The review will conduct a “root and branch review” of its “flawed” past practices, will publish a public report of its findings and will create a new mandatory code of conduct for all staff.
Barclays says the review is part of a wider effort to restore its reputation and it will establish a zero-tolerance policy towards anything that damages its reputation.
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