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Barclays chairman resigns over interest rate rigging scandal


New Delhi:

Barclays chairman Marcus Agius quit on Monday and said an interest rate rigging scandal had dealt "a devastating blow" to the bank's reputation and "the buck stops with me".


Agius, chairman at Barclays for five-and-a-half years, will stay in his position until a succession plan is assured. (Also read: 'For you big boy': How emails nailed Barclays')


Pressure had been built on CEO Bob Diamond and Agius to quit following a $453 million fine for Barclays by British and U.S. regulators last week for submitting inaccurate submissions on the Libor interest rate.


A key conversation held in October 2008 that was last week highlighted in documents about the scandal was between Bank of England (BoE) Deputy Governor Paul Tucker and Diamond, people familiar with the matter said.


Some people at Barclays mistakenly believed the bank had been granted permission to submit artificially low Libor estimates after that conversation, the documents released last week showed.


Barclays has admitted it submitted artificially low estimates of its borrowing costs from late 2007 to May 2009 because it thought rivals were doing the same and its higher submissions made it look troubled.


The U.S. Department of Justice said in a statement of facts document released after the fine that a conversation between a senior BoE official and a senior Barclays official on October 29, 2008 had encouraged the bank's submissions to be low.


The DoJ document said as the substance of the conversation was relayed to other Barclays' employees, some mistakenly believed they had been instructed by the BoE to lower Libor submissions.


Barclays has also admitted that some of its traders attempted to manipulate the setting of the London interbank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about $350 trillion of derivatives and other financial products.


More than a dozen other banks are being investigated in the long-running global probe by authorities in North America, Europe and Japan, including Citigroup, HSBC, UBS and Royal Bank of Scotland and analysts and bankers expect more big fines.


copyright @ Thomson-Reuters 2012

Story first published on: July 02, 2012 07:04 (IST)

Tags: Global markets




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