Barclay (NYSE:BCS) announced that it’s Chairman Marcus Agius will be resigning over the LIBOR scandal. Michael Derek Vaughan Rake may take over temporarily. Michael Rake is the Senior Independent director and former head of KPMG in the UK. The board has been under fire for approving generous compensation. In particular no one seems impressed with the deal CEO Robert E Diamond Jr scored. Shareholders overall are also upset with poor stock performance.
So maybe that’s why the moral compass was lost and the boys fudged around with LIBOR. The shareholders will have to write cheques totalling some $450 million in fines. You can bet there will be further law suits from aggrieved borrowers many of whom probably paid millions of dollars more in interest costs than they needed to.
Marcus Agius is symbolic and will probably walk with around $20 million or thereabouts. What about all the fancy vice presidents who also need to be cleansed out of the Barclay system. If you only take out one symbolic person you have not truly dealt with the problem.
To pull off this LIBOR caper you need a gang of thieves well-educated and dressed in bespoke suits. So what do you think. About a dozen suits or thereabouts, all being paid off for their silence. Gonna be hard getting another job in the “City” as they call it.
If you do not see internal communication about integrity very early in the process then you know it’s just cosmetic surgery. The cancerous rot will continue and mestastize into other problems in the very near future. Watch other banks smell the weakness, start poaching the good talent and going after profitable business lines. Barclays will be distracted.
George Gutowski writes from a caveat emptor perspective.
- Barclays bank chairman Marcus Agius ‘is doing the honourable thing by resigning’ (itv.com)
- Barclays Chairman to Resign (lewisphoto.wordpress.com)
- Profile: Sir Michael Rake (guardian.co.uk)