Tuesday, July 3, 2012

Barclays Chairman Resigns

Last week, Barclays (NYSE:BCS), a leading British bank, agreed to pay $450mn, to American and British authorities, on settlement of charges for manipulating key interest rates for its own benefit. The business was facing increasing pressure from its shareholders, general public and politicians to take action. This week, on Monday, the bank’s Chairman Marcus Agius resigned.


Commenting on the events, Mr. Agius said in a statement, “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.”

Mr. Michael Rake, an independent director of the bank’s board and former chairman of KPMG, will function as a deputy chairman until a new appointment is made.

The Barclay’s case has opened a Pandora’s Box. Investigations are now being carried out as to how some big banks influence borrowing costs for consumers. Barclays itself is doing an independent internal audit of its business activities which would focus on rate manipulation and its impact. The bank will then devise a new code of practice in the light of the audit.

Mr Agius is a well known figure in the global banking sector. He is also the honorary chairman of British Bankers’ Association, the organization that oversees London Interbank Offered Rate (Libor)

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