Marcus Agius, the chairman of British lender Barclays plc (BCS: Quote,BARC.L), is set to resign on Monday after the bank was fined 290 million pounds last week for attempting to manipulate the inter-bank lending rate, according to media reports. In the process, Agius will likely become the first victim of the interest rate fixing scandal that threatens to spill over to other banks.
Agius is set to announce on Monday that he will resign as chairman of Barclays and also as chairman of the British Bankers' Association, following public and political uproar over Barclays' role in trying to distort the inter-bank lending rate.
Sir Mike Rake, a senior independent director on the Barclays board, is likely to be appointed temporary chairman, as Barclays begins its search for a successor.
Barclays said Wednesday it agreed to pay 290 million pounds or $452 million to US and UK regulators to settle allegations that the company's employees tried to manipulate key global benchmark interest rates.
The resolution is part of an industry-wide investigation by authorities that several banks, including Barclays, sought to manipulate the London Interbank Offered Rate or Libor and the Euro Interbank Offered Rate or Euribor. The fine prompted Barclays' Chief Executive Bob Diamond and three other executives to voluntarily forgo their bonuses for this year.
The scandal is seen as a fresh blow to UK's troubled banking sector following massive bailouts paid for by taxpayers in the wake of the financial crisis.
Libor is based on rate submissions from a relatively small and select panel of major banks, including Barclays, and is calculated and published daily for several different currencies by the British Bankers' Association or BBA.
Libor impacts enormous volumes of swaps and futures contracts, commercial and personal consumer loans, home mortgages and other transactions. According to the BBA, swaps with a notional value of approximately $350 trillion and loans amounting to $10 trillion are indexed to Libor.
The UK government has ordered an independent review into the inter-bank lending rate. UK Prime Minister David Cameron has said he plans to make Diamond and top executives at Barclays accountable for the scandal, while opposition Labour leader Ed Miliband has demanded a full public inquiry into banking practices. British lawmakers are set to question Diamond about the scandal on Wednesday.
Agius joined Barclays' board on September 1, 2006 as a non-executive director and was appointed as chairman from January 1, 2007. He began a career in banking at Lazard where he worked from 1972 to 2006, latterly as Chairman of Lazard in London and Deputy Chairman of Lazard LLC.
Agius has had a frosty relationship with Barclays' shareholders since 2008, when the bank turned to Middle East investors to raise capital during the financial crisis, and after the company's board approved multimillion dollar pay packages of Diamond and other top executives.
BCS closed Friday's trading at $10.30, down $0.54 or 4.98 percent on a volume of 14.15 million shares.
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by RTT Staff Writer
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