Reuters: Regulatory News: UPDATE 1-Barclays chairman to quit; Libor discussed with BoE

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UPDATE 1-Barclays chairman to quit; Libor discussed with BoE Jul 1st 2012, 19:41 Sun Jul 1, 2012 3:41pm EDT * Barclays to announce Chairman Agius to go on Monday-source * BoE's Tucker, Barclays CEO spoke on Libor in 2008-sources * Tucker/Diamond chat led to "mistaken" setting of low rates By Avril Ormsby and Steve Slater LONDON, July 1 (Reuters) - Barclays Plc Chairman Marcus Agius is set to quit o n M onday as the interest rate rigging scandal takes its first major scalp and threatens to widen to other banks, raising questions about the involvement of the Bank of England. Agius, chairman at Barclays for 5-1/2 years, is expected to resign o n M onday, a person familiar with the matter said. Pressure has built on CEO Bob Diamond and Agius to quit following a $453 million fine for Barclays by British and U.S. regulators last week for submitting inaccurate submissions on the Libor interest rate. A key conversation held in October 2008 that was last week highlighted in documents about the scandal was between Bank of England (BoE) Deputy Governor Paul Tucker and Diamond, people familiar with the matter said. Some people at Barclays mistakenly believed the bank had been granted permission to submit artificially low Libor estimates after that conversation, the documents released last week showed. Barclays has admitted it submitted artificially low estimates of its borrowing costs from late 2007 to May 2009 because it thought rivals were doing the same and its higher submissions made it look troubled. The U.S. Department of Justice said in a statement of facts document released after the fine that a conversation between a senior BoE official and a senior Barclays official on Oct. 29, 2008 had encouraged the bank's submissions to be low. The DoJ document said as the substance of the conversation was relayed to other Barclays' employees, some mistakenly believed they had been instructed by the BoE to lower Libor submissions. Barclays has also admitted that some of its traders attempted to manipulate the setting of the London interbank offered rate (Libor), which is used worldwide as a benchmark for setting prices on about $350 trillion of derivatives and other financial products. More than a dozen other banks are being investigated in the long-running global probe by authorities in North America, Europe and Japan, including Citigroup, HSBC, UBS <UBS N.VX> a nd Royal Bank of Scotland, and analysts and bankers expect more big fines. Link this Share this Digg this Email Reprints

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