Agius quits to save Bob Diamond - but he was due to go anyway

Jul 2, 2012
The Mole

Barclays chairman falls on sword – but with new claims against Bank of England, it will solve nothing

BOB DIAMOND, chief executive of Barclays, will tell the 'hanging jury' at the Treasury Select Committee on Wednesday that the Bank of England colluded in the attempt to fiddle the inter-bank Libor interest rates.

The resignation today of Barclays' chairman Marcus Agius will do nothing to repair the damage to the British banking industry, though it might buy more time for Barclays.

It was revealed this morning on BBC Radio Five Live by The Independent editor Chris Blackhurst that Agius, aged 65, who earns £750k a year for a three-day-week, was going to retire anyway later this year. He is falling on his sword to spend more time with his beloved gardens on his Hampshire estate in a bid to save Diamond.

Diamond, meanwhile, is determined to fight back by throwing more mud at the Bank of England by claiming that Barclays was operating under an instruction from its deputy governor, Bob Tucker, handed down in a phone call in autumn 2008.

The suggestion is that Tucker sanctioned Barclays – in the words of BBC business editor Robert Peston - "to lie about what they were paying to borrow when providing data to the committees that set the Libor rate".

Diamond's explosive claim could do far more damage to the reputation of British banking – Tucker was a favourite to succeed Mervyn King as Bank governor - than the excesses of the Alpha-male traders who sought to rig the interest rate to benefit Barclays and other banks.

Diamond may be accused by his many critics on the select committee of spreading the blame. There are no written records of his conversation in 2008 with Tucker, but according to Robert Peston, he has the Financial Services Agency to back him up.

The FSA referred to a 'telephone conversation' between a senior individual at Barclays and the Bank of England in the damning report that sparked the latest demands for heads to roll.

Peston says this morning that he has established that the conversation referred to by the FSA was between Diamond and Tucker, and concerned "external perceptions" of Barclay's Libor submissions - but Diamond and Tucker have different versions of their chat.

No doubt the committee will want to question Diamond closely on this allegation.

The Agius resignation is clearly a tactic to take the heat off the calls for Diamond to go. While Agius is one of the old school – an apparently honourable and decent merchant banker - Diamond was in charge of the controversial trading arm when the 2008 conversation is said to have taken place.

Diamond, for more than a decade, ran Barclays' testosterone-charged investment banking arm, Barclays Capital, which, it was reported today, even City rivals joked was staffed by Alpha males.

When Diamond moved up to being CEO in 2011, he told the Commons Treasury select committee that "there was a period of remorse and apology for banks and I think that period needs to be over". On Wednesday, many on the committee will be determined to make him eat his words.

But it doesn't end there. This latest scandal has caused a fresh rift in the coalition between David Cameron, who reluctantly agreed to an internal inquiry into the banking industry, and Liberal Democrats who want an early commitment to much tougher sentences.

Vince Cable, the Lib Dem Business Secretary, says prison sentences should be handed out to those who commit City fraud and is calling for tougher legislation on the banks. If Dave holds back, he will be accused of simply protecting his mates in the City.

Sign up for our daily newsletter

Disqus - noscript

Prison. Nothing less.

We can't rely on the Government for honesty or Ethics. Quite the contrary

Now it seems the Bankers are practicing institutional crookedness.

We are being ripped off by every institution there is.

Most of the so called "middle class" must be getting restive.

So now, give me one reason why I should abide by the law anymore.

Beware the man who has nothing to loose.

The buck stops with him, Agius says. But with whom do the bucks stop?

With the the doe, I hear!