The interest rate rigging scandal has claimed its first scalp among the senior management of Barclays with the bank’s Chairman set to announce his resignation today.
The scandal has claimed its first scalp among the senior management of Barclays, as the bank confirmed on Sunday that Marcus Agius, its chairman, was set to resign
Marcus Agius is expected to say he is “truly sorry” for the scandal, which has dealt a “devastating blow” to the bank. Meanwhile, Lord Turner of Ecchinswell, the head of the Financial Services Authority, said “more heads will roll” at badly behaving banks.
Yesterday it emerged that Barclays stepped up its efforts to rig interest rates after Bob Diamond, its chief executive, personally spoke to the deputy governor of the Bank of England. Bob Diamond had a conversation with Paul Tucker about how much Barclays was claiming it had to pay to borrow money during the financial crisis in 2008.
After Mr Diamond spoke to Mr Tucker, Barclays staff came to believe the Bank of England wanted them to falsify this data — which was used to calculate Libor, the interest rate that banks pay to each other.
The bank’s traders then escalated their secret attempts to manipulate the markets and make it appear that the bank was paying less to borrow money than was actually the case, documents show. Sources at both banks said this was the result of a “misunderstanding” and insisted that Mr Tucker had not sanctioned Barclays’ actions.
At the time, the Bank of England was keen to see a lower Libor rate, as that would have been a positive sign in the depths of the credit crunch.
The disclosure increases the pressure on Mr Diamond, who has now been put at the heart of discussions about the fixing of Libor. When he gives evidence to MPs this week the bank chief will also have to explain why his employees were left with the understanding they had the Bank of England’s blessing.
As the board of Barclays called an emergency meeting last night, there were calls for a criminal inquiry into the bank by Vince Cable, the Business Secretary, and Lord Blair of Boughton, the former Metropolitan Police commissioner.
Mr Diamond is also facing calls to step down over his failure to spot the scandal, which may have caused banks to charge mortgage holders, credit card users and businesses too much for billions of pounds in loans.
Barclays was last week fined £290 million for its role in the affair. Other high street banks are expected to face heavy penalties for similar wrongdoing