Barclays boss under pressure as bank inquiry launched

Tue Jul 3, 2012 12:11am EDT
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By Steve Slater and Matt Falloon

LONDON (Reuters) - Pressure grew on Barclays Plc Chief Executive Bob Diamond to quit as Britain launched an inquiry on Monday into a market-rigging scandal, saying a "culture that flourished in the age of irresponsibility" among bankers had to end.

Barclays Chairman Marcus Agius resigned on Monday, saying "the buck stops with me" as the scandal over manipulating Libor interest rates claimed its first major scalp.

But his departure did not take the heat off Diamond, who ran Barclays' investment banking arm when the rate rigging took place, drawing a record fine for the lender last week in a scandal likely to involve many more banks.

"The buck in Barclays stops with Bob Diamond, and it is Bob Diamond who must accept responsibility," said John Mann, an opposition Labor member of a parliamentary committee that later this week will question Agius and Diamond.

"He must resign. He's got to go," Mann told Sky News.

Anger with the culture of bankers in London, a world financial capital and major part of the British economy, crossed the political divide with Conservative finance minister George Osborne outlining the parliamentary inquiry.

"The behavior of some in the financial services has damaged the reputation of an industry that employs hundreds of thousands of people and is vital to the economic prosperity of the country," Osborne told parliament. "It's time to deal with the culture that flourished in the age of irresponsibility and hold those who allowed it to do so to account."

Barclays has admitted that some of its traders tried to manipulate the London Interbank Offered Rate (Libor), which is used worldwide as a benchmark for prices on about $350 trillion of derivatives and other financial products across a range of currencies and loan durations.   Continued...

Barclays PLC President Bob Diamond (L) poses for photographs with CEO John Varley and Chairman Marcus Agius (R), after being named as the company's next chief executive officer at a bank branch near their Canary Wharf headquarters in London in a September 7, 2010 file photo. Barclays announced the resignation of Agius on July 2, 2012. REUTERS/Dylan Martinez/files