Calls for Barclays boss to quit

Pressure mounted for Barclays Plc chief executive Bob Diamond to quit after Britain’s third-biggest bank sacrificed its chairman over an interest rate rigging scandal that has dealt “a devastating blow” to its reputation.

Chairman Marcus Agius, who said “the buck stops with me”, is the first major scalp from a scandal that cost Barclays a record fine and is likely to involve more banks and embarrass financial regulators.

Mr Diamond was running Barclays’ investment banking arm when the rate manipulation took place.

Mr Diamond will have to explain himself to MPs tomorrow, as will Mr Agius on Thursday.

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 $350tn (€278tn) of derivatives and other financial products.

British prime minister David Cameron has called the scandal “extremely serious”, and said he would set up a full parliamentary inquiry into the banking industry, calling for action “right across the board”.

Meanwhile, Mr Agius, 65, said: “Last week’s events — evidencing as they do unacceptable standards of behaviour within the bank — have dealt a devastating blow to Barclays reputation. I am truly sorry that our customers, clients, employees and shareholders have been let down.”

Britain’s Serious Fraud Office said it would decide within a month whether to press criminal charges against any of the banks under investigation.

The record fine imposed on Barclays showed the financial industry needed a fundamental rethink, the Financial Services Authority said.

“Perhaps the reaction to the penalty imposed last week on Barclays will be a watershed moment, the point when the industry realises that it also has to rise to the challenge and to recognise that things have to change,” said Tracey McDermott, the authority’s acting head of enforcement.

The affair comes as banks — already under fire for their role in the financial crisis — are facing a new wave of public outrage over a systems outage at RBS last month and evidence of mis-selling financial products.