Barclays faces serious charges over the fixing of the London Inter-Bank lending rate (Libor). Its chairman, Marcus Agius resigns. Will Bob Diamond, the bank’s most valuable player (MVP), also be forced into premature retirement?
Acceptance of disgrace and retention of honour
It as ancient symbolic gesture for a leader to fall on his sword, the ultimate gesture of acceptance of disgrace and retention of honour. The gesture is sometimes made with a little help from others. A modern version is the loaded pistol provided to the exposed traitor. The Telegraph reported the resignation [Monday 2nd July, 2012]:
Barclays was fined a record £290m last week for attempting to manipulate the interbank lending rate, Libor, between 2005 and 2009.
Mr Agius, chairman for the past five years, said on Monday: “Last week’s events – evidencing as they do unacceptable standards of behaviour within the bank – have dealt a devastating blow to Barclays reputation. As Chairman, I am the ultimate guardian of the bank’s reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside.”
A metaphoric pistol?
Maybe Mr Agius was handed the metaphorical equivalent of a loaded pistol after being cornered by his enemies. His gesture of self-destruction is something out of the last scene of a spy-thriller. It also appears consistent with his reputation of conducting business in an honourable way. There’s Mr Agius for you. But then there’s his CEO, the finance superstar and controversial Mr Diamond.
Then there’s Diamond Bob..
The impact of the Libor wrongdoings will have further repercussions Mr Aigus and the Bank’s CEO Bob Diamond were expected to receive an invitation to spend a little time with members of Her Majesty’s Select Finance Committee after their next meeting [Tuesday 3rd July 2012].
Now Mr Aigus is gone. But Diamond Bob is a quite different figure. His reputation as a successful financial leader was reflected in his reputation and glittering remuneration year by year. But this is the year of the stakeholder spring. Mr Diamond is no longer described primarily as a generator of wealth and employment, even in the generally admiring pages of the financial press. Despite the recently-imposed fine on Barclays of £291 million, as well as Revenue and Customs tax settlement fine of nearly twice that amount, Mr Diamond may still be seen as a valuable (if somewhat diminished) asset by some of Barclays’ the big stakeholders.
That’s the thing about financial assets. They tend to go up and down in value.
To be continued
The Libor affair is capturing the headlines this week. We examined Mr Diamond’s spectacular knack for making money and generating public enemies in an earlier post.