July 2, 2012 7:27 pm

Taking one for the Barclays team

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But Marcus Agius’s resignation will not end Libor affair

In resigning as chairman of Barclays, Marcus Agius declared on Monday that the “buck” for the swirling Libor scandal should rest with him.

On one level, his decision is commendable: in recent years bankers have too often sought to evade responsibility for wrongdoing on their watch. But Mr Agius is mistaken if he believes that his sacrifice will be an end to the matter.

It remains unclear how many people knew about the fiddling of Libor and how high up the bank this went. But whoever was involved, these were decisions and actions for which Bob Diamond, the chief executive, must be held accountable. The idea that all can be wiped away because Mr Agius chooses to sacrifice himself on the altar of the bank’s battered reputation is for the birds.

Mr Diamond’s letter to staff on Monday suggests that he does not quite grasp this. While he deigns to shoulder some responsibility, this is only for ensuring that “these behaviours” do not happen again. He fails to explain, however, why it was not similarly his responsibility to ensure that they did not happen in the first place.

There are still plenty of other questions that need to be answered. In this regard, Barclays’ decision to conduct a review of its business practices may be a step in the right direction. This exercise will, however, command respect only if it is conducted by a truly independent figure and its conclusions published in full. The House of Commons will have an opportunity to put some questions to Mr Diamond later this week. MPs could usefully start by establishing how much the board knew about the fiddling of Libor and, if so, when these discussions took place.

True, Barclays is unlikely to be the last bank collared for tweaking interest rates: 20 banks are embroiled in the investigation. It is also unclear – in the case of the misreporting that flattered Barclays’ funding costs during the crisis – how much the authorities knew. Barclays has said that the Bank of England was aware of its suspicion that other banks were understating their funding costs at this time. But there is no evidence that the BoE gave its blessing to misreporting – tacit or otherwise.

In the meantime, Barclays should strain every sinew to find a replacement for Mr Agius in the chairman’s seat. That individual must then decide whether they expect the chief executive to take full responsibility for the bank’s activities or whether they, like Mr Agius, are prepared to be the fall guy for any bad behaviour.

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