Barclays to review 'flawed' practices as Agius resigns

 

The BBC's Robert Peston reports on the ''momentum'' that was building for Mr Agius to go

Barclays has promised a "root and branch review" of its business practices and announced the resignation of its chairman Marcus Agius.

This follows Barclays' attempts to manipulate inter-bank lending rates, for which it was fined £290m ($450m).

In a statement, Mr Agius said: "The buck stops with me."

The government is expected to announce a wider inquiry into banking later, in addition to the inquiry of the abuses of Libor rates already announced.

Chancellor George Osborne is expected to announce more details of the wider inquiry when he makes a statement to the House of Commons at about 1630BST.

The new inquiry will not, however, be a full public inquiry like the Leveson Inquiry into press standards, which Labour has asked for.

Leader of the opposition, Ed Miliband, said criminal charges should be brought against those involved in the rate-fixing scandal and called for the resignation of Barclays chief executive Bob Diamond.

He said it was really important to restore trust in British banks. "I really don't think that can be done by Bob Diamond," he said.

Former Barclays director Baroness Wheatcroft told BBC News that the chairman was currently "carrying the can" and said Mr Diamond's resignation was now "inevitable".

Blow to reputation

Start Quote

Interestingly Sir Mike Rake - the chairman of BT - has been appointed deputy chairman of Barclays, which many will see as the strongest possible signal that the board wants him to succeed Mr Agius as chairman”

End Quote

Mr Diamond will appear before MPs on the Treasury Committee on Wednesday, followed by Mr Agius on Thursday.

Mr Agius has also stepped down as chairman of the British Bankers' Association, which is responsible for compiling Libor.

Mr Agius, who also serves on the BBC's executive board, said last week's events were evidence of "unacceptable standards of behaviour within the bank".

He said the findings had "dealt a devastating blow" to Barclays' reputation.

Barclays' board has launched an audit of its business practices, which will be conducted by an independent body and report to the new deputy chairman, Sir Michael Rake.

The bank promised:

  • a "root and branch review" of its "flawed" past practices
  • a public report of the audit's findings
  • a new mandatory code of conduct for all staff

Barclays will establish a "zero tolerance policy" to anything that damages its reputation, the bank said in the statement.

Sir Michael Rake, BT chairman and senior independent director at Barclays, has been appointed deputy chairman at the bank. He is seen as a likely successor to Mr Agius.

Mr Agius will stay on as chairman while Sir John Sunderland, a non-executive director of Barclays, looks for his replacement.

Different culture

Shareholder reaction

Peter Kent from Ashford has been a Barclays' shareholder for two years.

"I have seen my investments diminish week by week.

"Dividends and profits have continued to decline, which has been extremely frustrating.

"There has been a lot of bad press about Barclays, with fines for mis-selling, wrongdoing and bad practice. Their credibility and profitability has reduced because of this. This inter-bank lending scandal is just the latest fiasco.

"Bob Diamond has an exorbitant salary, which is unjustified. He has failed to deliver in his position of CEO.

"Marcus Agius should have ensured that the execs were doing their job properly and should have replaced Bob Diamond.

"Barclays needs a new CEO. This would bring credibility to the bank and give the opportunity to concentrate on good practice, profitability and a return for shareholders."

Barclays was fined after the Financial Services Authority (FSA) found its traders had lied about the interest rate other banks were charging it for loans. Investigations are also under way at RBS, HSBC, Citigroup and UBS.

Giving a lower reading than the true rate would give the impression that Barclays was considered a better lending risk than it actually was.

Reporting a higher reading than the real rate could have inflated trading profits artificially, misleading investors and regulators.

The FSA found evidence that Barclays, sometimes working with staff at other banks, had tried to manipulate Libor (the London Inter Bank Offered Rate) and its European equivalent Euribor between 2005 and 2009.

Bob Diamond said Mr Agius' decision "deserves all of our respect" and paid tribute to Mr Agius' six years as chairman: "He has been a thoughtful and supportive colleague to me in all of my roles - especially since I became chief executive last year."

But the BBC's business editor said some shareholders thought Mr Agius had failed to stand up to Mr Diamond, who was regarded as very talented but also very headstrong.

Earlier this year, Mr Agius was criticised for backing a £17.7m pay deal for Mr Diamond. A number of shareholders voted against the remuneration package.

Mr Diamond welcomed plans for an independent audit: "I am committed to ensuring that the recommendations from this review are implemented in full."

He also promised to "continue to build a culture that all of those with a stake in Barclays can be proud of".

 

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  • rate this
    +5

    Comment number 363.

    SORRY IS NOT ENOUGH

    TAKE THEIR BONUSES SINCE THE YEAR THIEVING STARTED

    FINE THEM HALF THEIR WAGES IN ALL THE YEARS
    THEY WERE ROBBING

    LOCK THEM FOR THE SAME AMOUNT OF YEARS

  • Comment number 362.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    -1

    Comment number 361.

    Who took did away with the Regulators when he became Chancellor?, not Osborne or this government!.

  • rate this
    +4

    Comment number 360.

    Excellent, i look forward to my new criminal future where i can commit fraud and con people but not have to go to prison! I may have to face some 'serious questions' but at least that will be at MY convenience and my MP friends wont give me a hard time. and i'm sure i can find a friend of retiring age to resign for me. Just so long as i dont commit a REAL crime, eh

  • rate this
    +4

    Comment number 359.

    why not just shoot the bankers who committed fraud now and save time.

  • rate this
    +2

    Comment number 358.

    Marcus Agius has resigned as chairman of Barclays over the scandal, saying: "the buck stops with me".

    Sorry Mr Agius, but falling on your sword for those plotting behind the curtain will not be enough. Cameron will have to make this a full public enquiry and expose all those involved or face the full anger of the british public.
    Cameron, we are not asking you, we are TELLING you. DO IT!

  • rate this
    +2

    Comment number 357.

    It seems this story doesn't even merit front page news now.

    Not the first time a story as damning as this got buried is it?

  • rate this
    +3

    Comment number 356.

    "The Serious Fraud Office (SFO) is considering whether to bring criminal charges against bankers who tried to manipulate inter-bank lending rates."

    1. What is there to consider?

    2. Tried to manipulate? I was under the impression they 'did' manipulate the rate, or are they also going to go after those who tried and failed to manipulate?

  • rate this
    +1

    Comment number 355.

    I was born in London, these bankers have brought down the neighbourhood, tainted my town, we'll all be tarred with the same brush. The city of London, a cesspit at its centre, chaos and apathy all around. Welcome to London 2012, do you feel the heat?.

  • rate this
    +2

    Comment number 354.

    #329
    There are many banks involved and we neednt plunge them into crisis by sacking all of the CEOs.
    --
    Hate to break it to you Tobe but they've been in crisis since they owned up to the cheating and off balance sheet scams they perpetrated

    We're not plunging banks into anything - we're trying to pull them out of the cesspit they created and even then it will take a while to erradicate the stink.

  • rate this
    +2

    Comment number 353.

    What we need is World Wide Regulations that limit the gambling, creative investment vehicles and dishonest practices, institute stiff penalties and fines with teeth for the Banks, backed up with jail time for the people involved
    If there are no consequences for cheating and dishonesty, do not expect the moral and ethical standards of Bankers to change

    Get politics out of Banking & Investing

  • rate this
    +1

    Comment number 352.

    #324 Nationwide cleverly changed the rules while the likes of Abbey were being carpet-bagged to prevent new account holders having voting rights.

    That said their chief exec has just put in a request for a one million bonus award which people are not happy about.

  • rate this
    +1

    Comment number 351.

    shut them down and fine them all its about time we got back on the banks for the bad mess they have got us into

  • rate this
    +1

    Comment number 350.

    Common Purpose mandarin Sir Mike Rake to replace Agius at Barclays. Now there's a surprise (sarcasm mode). Maybe another Common Purpose leading light from the BBC will replace Diamond. Methinks a move from the frying pan into the fire.

  • rate this
    +1

    Comment number 349.

    Clearly better oversight of banking is needed. The rot that has become established, often at the top, has ruined the lives of many innocent people. The system as it exists has not been able to do the job preventing fraudulent practice.

  • rate this
    +1

    Comment number 348.

    Re 343. Good point. Maybe this fine should be put towards reimbursing shareholders of Bradford & Bingley who were encouraged to inject more money right up until the day of the collapse. The company was subsequently 'given' to Santander, ordinary shareholders lost everything and Santander walked off with a bunch of new customers and no debts. Outrageous & hushed up by HMG/Santander in the chaos.

  • rate this
    +2

    Comment number 347.

    Fraud on a colossal scale is normally associated with organised crime

    Needed: Wholesale reform imposed with the encouragement of a size 10 government boot in the proximity of their derrieres and auditors who actually know stuff
    Are the Double Dip twits man enough for the job - I suspect Gideon fills bankstas with the same degree of dread one might exhibit when confronted by a wet droopy lettuce

  • rate this
    +4

    Comment number 346.

    Whilst a public enquiry would be embarrassing for the City of London it is worth it to clear out the 'cancer' that has infected it. New guidelines, regulators with teeth, penalties, socially responsible banking and more competition are needed to clean up the city and restore its reputation. Unfortunately the British public have short memories and are fickle. The politicians know this well.

  • rate this
    0

    Comment number 345.

    A nonsense story to distract our attention from the BBC paymasters, the banks.

  • rate this
    +2

    Comment number 344.

    The city is ablaze, " Infamy!, infamy!,.. they all got it infamy! ". Marcus Agius falls on his sword, the fiddlers, fiddle on, the city continues to burn.

 

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