Inaccurate submissions of Libor interest rate data, which first cost Barclays (NYSE: BCS) $453 million in fines to U.S. and UK regulators, has cost the chairman of the bank, Marcus Agius. As he left, he commented that “the buck stops with me.” Since Agius did not really run the bank, and traditionally the CEO of UK financial firms handle day-to-day activities, it is a wonder CEO Bob Diamond is still there.
Most are betting that he will be gone soon, and some analysts who track large banks think Diamond will not the the last to go. The light of an ongoing investigation has fallen on RBS (NYSE: RBS) recently. Since Libor interest rate activity is a huge source of income for many banks, regulators will continue to dig aggressively, based on the belief that if Barclays did it, so did most of its peers.
Douglas A. McIntyre