Barclays chair to resign over Libor scandal

The chairman of Barclays Bank is set to step down after the group was fined for attempting to manipulate the inter-bank lending rate.

Marcus Agius will announce later today that he is to leave his post in the face of public and political fury over the bank's efforts to distort the rate at which banks lend to each other, according to the BBC.

"Today Mr Agius has told his colleagues on the Barclays board that he will be going," BBC business editor Robert Peston said.

"It's not wholly unexpected," he added. "Mr Agius was first in the firing line as far as shareholders were concerned, they've been thinking for some time that Barclays might need a new chairman, he's been in the job for six years next year."

Mike Rake, chairman of BT, is favourite to replace the outgoing chairman, Sky News reported.

The broadcaster also claimed that the Barclays board was set to commission an independent inquiry into events.

The minister of business, Vince Cable, earlier backed calls for a criminal investigation into bankers involved in the scandal, which cost the bank 290 million pounds ($NZ568m) in fines.

Traders at the bank are suspected of manipulating the Libor rates, which play a major role in international financial markets and affect businesses and consumers, in order to skew the markets in their favour.

It emerged earlier on Sunday that The Royal Bank of Scotland had sacked four traders over their alleged involvement in the affair, raising suspicions that the practice was widespread.

Prime Minister David Cameron on Friday reiterated his intention to bring Barclays chief executive Bob Diamond and others at the bank to account.

British MPs are due to question Diamond about the affair on Wednesday.

Adair Turner, head of the regulating Financial Services Authority (FSA), earlier explained to the BBC the fine was the toughest penalty available and urged for a tightening in the law.

Extracts from an FSA report released on Wednesday showed Barclays staff mistakenly believed the Bank of England had encouraged them to manipulate the rate, according to the Press Association.

BoE deputy governor Paul Tucker spoke with Barclays in a telephone call in 2008, the details of which apparently became inaccurately transmitted through the bank, the report found.

"As the substance of the telephone conversation was relayed down the chain of command at Barclays, a misunderstanding or miscommunication occurred," it said.

"This meant that Barclays' submitters believed mistakenly that they were operating under an instruction from the Bank of England (as conveyed by senior management) to reduce Barclays' Libor submissions."

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf05 at 23 Oct 2014 04:54:06 Processing Time: 264ms