Barclays’ buck shouldn’t stop with Agius
By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Marcus Agius said âthe buck stops with meâ, in resigning after the interest-rate rigging scandal. But the buck shouldnât stop with the Barclays chairman. It is appropriate that Agius has fallen on his sword because he hasnât acted as a strong counterweight to Chief Executive Bob Diamond. But the chief executive was responsible for the culture at the Barclays Capital investment banking arm, where the manipulation took place, as well as other lapses.
Diamond has done an extraordinary job expanding BarCap. But it is hard to believe he is the right person to clean it up. In a BBC lecture last year, he said that âthe evidence of culture is how people behave when no one is watchingâ.
Not only did several Barclays traders behave badly when he was not watching; he himself was somehow involved in a chain of discussions which led to the bank submitting an artificially low interest rate to disguise an appearance of vulnerability during the credit crisis.
The interest-rate rigging scandal isnât the only black mark against Diamond. He received a hefty bonus for last year despite a performance he himself acknowledged was âunacceptableâ. And he presided over a bank that concocted aggressive tax avoidance schemes.
Barclays may hope that the blood-letting will stop with Agius. But the scandal has a dynamic which may make this hard. The next flashpoint will be on July 4, when Diamond has been summoned to appear in front of the House of Commons Treasury Select Committee. Given that politicians are competing with each other in anti-banker rhetoric, this will be an uncomfortable experience – even if Diamond can argue that Barclays was not alone in manipulating rates.
Beyond that, the spotlight will switch to Barclaysâ new chairman. Sensibly, the bank is looking both externally and internally; the main inside candidate is Michael Rake, now promoted to deputy chairman. It needs to find someone who both understands banking and is tough enough to find a replacement forÂ Diamond.