By Paul Hodgson – CCO and Senior Research Associate
Barclays’ chairman Marcus Agius announced his resignation today, indicating that he had stepped down because he was the “ultimate guardian of Barclays’ reputation”. Barclays was the recipient of a massive $450 million fine last week because of its involvement in manipulating LIBOR, the interest rate at which banks loan money to each other. In a corporate world where few banking CEOs have actually resigned – except for those facing prosecution and/or the bankruptcy of their bank and despite their clear involvement in the financial crisis – this step must and should set an example. For CEOs who continue as chairmen of the board of their relevant institutions, it can also be seen as one more argument for separating the roles of chairman and CEO; Barclays’ CEO Bob Diamond has not indicated that he will be stepping down from his position. Both will soon face questioning from the House of Commons Treasury Committee.
Comprehensive reviews of interbank lending and the entire banking sector are being urged by politicians and consumer watchdogs in the U.K. following this further revelation of banking fraud. Investigations are ongoing at a large number of other banks operating in London, including those with headquarters in the U.S.