Barclays bank PLC (LON:BARC) (NYSE:BCS) was fined $453 million for its alleged role in manipulating the LIBOR, a benchmark financial rate that is used to settle derivatives and other global contracts amounting over $500 trillion. Earlier today, news broke that Barclays Chairman Markus Agius had resigned, owning responsibility for the scandal: “The buck stops with me and I must acknowledge responsibility by standing aside.”
Agius also quit from his position as Chairman of the British Bankers’ Association, another body involved in the calculation of the LIBOR.
Barclays’ troubles have not ended here, however. The British Serious Fraud Office has entered the fray and may decide within a month whether it will slap Barclays, or the employees involved, with criminal charges, according to a report in The Associated Press.
In contrast, across the Atlantic, The U.S. Justice Department has waived prosecution of the company for co-operating in the investigation, though individuals could still be criminally prosecuted.
In a merciless fallout of the scandal, Agius’ resignation has not calmed demands that top management at Barclays be hauled over the coals for the manipulation – there are now demands for the resignation of Barclays Chief Executive Bob Diamond, too. Ed Miliband, leader of the opposition Labour Party, demanded that Diamond resign. “I want to see criminal sanctions against those who broke the law,” he said.
So far, Diamond has given no indications that he would be following Agius’ example. According to an internal bank memo, Barclays’ own disciplinary process “will be completed swiftly now that regulatory reviews are complete,’ and penalties could include clawing back bonuses and dismissal. Diamond expressed regret that the actions took place during his watch, and that it was his responsibility that they would not repeat. Diamond is scheduled to appear before lawmakers Wednesday.
Gary Greenwood, an analyst at Shore Capital, said, “While the departure of Mr. Agius will grab the headlines today, the bigger issue remains whether Mr. Diamond should also remain in his role. From a pure operational perspective it is not clear to us that his removal would be beneficial, but we question whether the negative sentiment towards the company, of which he is the focus, can be repaired while he remains at the helm.”