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Barclays: does the buck really stop at Agius?
The resignation of Barclays' chairman Marcus Agius does not relieve the pressure on chief executive Bob Diamond.
So we got a big scalp from Barclays, but not the one some of us wanted.
Agius's departure makes it difficult for Diamond to go in the short term, leaving the bank totally leaderless. This is why Barclays (BARC.L) shares are up 7p, or more than 4%, to 170p today.
I wonder, is Barclays – a bank that has gained a reputation for pushing things as far as it can – taking another big risk? Is it gambling that shareholders will not dare to demand the head of the CEO as well as the chairman?
If so, it’s another reckless challenge that could still earn the bank a red card. Some institutional shareholders may be unwilling to see both men go at once, but the public and politicians are in the mood for a clearout, such is the outrage at the scandal that earned Barclays fines of around £290 million last week.
Sacrificing Agius may satisfy demands for someone on Barclays' board to pay the price for the damage to the bank's reputation.
But the impression that Barclays' board accepted the resignation from the wrong man will be hard to shake off.
After all, Agius wasn't even at the bank when Barclays was lying about its borrowing rate and manipulating Libor, the inter-banking lending rate. He was chairing British Airports Authority, in his first big job since leaving Lazards, the investment bank. It was, of course, Diamond who was in charge of Barclays Capital, the investment banking division at the time and the place where the offences occurred.
It is all very well for Agius to say in today's statement that as 'the ultimate guardian of the bank's reputation' the 'buck stops with him'. However, the same principle could be applied to Diamond.
Besides, Agius is a poor sacrifice compared with Diamond, who has a much higher profile as a result of his misguided attempts to argue that bankers should stop saying sorry and that he deserved his £17 million remuneration last year.
Agius was damaged goods in the eyes of some shareholders, not strong enough to stand up to Diamond. In that respect this looks like a convenient time to get rid of him, rather than a genuine attempt to reform the bank.
So, while the chairman's exit bolsters Diamond’s position, it does nothing to relieve the pressure on him.
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