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Question of the Day
Announcing his departure, Agius said “the buck stops with me and I must acknowledge responsibility by standing aside.”
Agius‘ position was particularly sensitive as he was also chairman of the British Bankers’ Association, the trade body that collects the banks’ rate submissions to calculate the LIBOR. He resigned from that post as well on Monday.
Diamond said that on “the majority of days,” traders didn’t ask for false submissions, and in some case such requests were rejected by employees who submitted data.
Prime Minister David Cameron, meanwhile, announced a parliamentary inquiry into the culture and standards of the banking industry, to report by the end of the year.
Treasury chief George Osborne also ordered a review of whether setting the LIBOR should be a regulated activity and whether, as Bank of England Governor Mervyn King as suggested, it should be based on actual transactions instead of forecasts.
The British Bankers’ Association earlier this year began its own review of LIBOR but has yet to announce recommendations.
Diamond is likely to face a grilling Wednesday when he appears before a group of lawmakers. His critics say he is culpable because he set the aggressive style at Barclays Capital, the investment banking operation he previously led.
He has said the actions by Barclays and its traders were wrong, but offered no suggestion he might leave his post. In some cases, regulators found individual Barclays traders encouraged colleagues to file false reports to protect their own dealings.
“If anything, by falling on his own sword, Mr. Agius leaves the board temporarily weakened at a time when a strong leader is required to make tough decisions,” said Gary Greenwood, analyst at Shore Capital.
“While the departure of Mr. Agius will grab the headlines today, the bigger issue remains whether Mr. Diamond should also remain in his role,” Greenwood added. “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.”
Among other banks being investigated, Royal Bank of Scotland —82 percent owned by British taxpayers — declined to comment Monday on reports it had fired three traders in London and one in Singapore last year because of interest rate manipulation.
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