| LONDON, July 15
LONDON, July 15 The interest rate rigging
scandal that has rocked British bank Barclays will be
"put in perspective" by the fines handed out to rival banks,
according to comments made by its top executives to staff.
"As other banks settle with authorities, and their details
become public, and various governments' inquiries shed more
light, our situation will eventually be put in perspective," the
bank's executive committee said in the memo to staff on Friday.
They admitted that customers, clients, shareholders and
regulators "all have a right to feel let down" after the bank
was fined $450 million by U.S. and UK authorities for
manipulating Libor interest rates.
But the bank played down speculation it will sell or
spin-off its investment bank or make an abrupt change in
In what it called "an unequivocal statement" it said: "Our
strategy and business model were right for Barclays before
recent events, and they remain right for Barclays now."
Barclays confirmed the authenticity of the memo, which was
from Executive Chairman Marcus Agius and the executive
committee, and titled "Restoring our Reputation, Building our
Barclays is the only bank so far to admit any wrongdoing in
giving false information as part of the complex process of
setting Libor, in order to rebut speculation about high funding
costs during the financial crisis.
But more than a dozen banks are expected to be drawn into
the scandal, which is being probed by authorities in North
America, Europe and Japan.
Barclays said it had paid a heavy price in terms of its
reputation and leadership. Its chief executive Bob Diamond has
quit and Agius will leave once new leaders are picked.
T he memo said the task now was to restore its reputation,
including "building an overarching brand recovery plan".
Appointing a new chairman and chief executive would be vital
for that, but "these processes should not be rushed", it said.
"The macro-environment remains febrile, especially in
Europe. We have to remain vigilant on balance sheet exposures
and risk management," it added.
The scandal has also brought to light a strained
relationship between Barclays and its regulator, the Financial
Services Authority, which has concerned investors.
One top 30 investor in the bank said: "It (Barclays) has
done very little to smooth its relationship with the government
or the regulator or even shareholders.
"If it tries to tackle some of the cultural issues and the
excessive remuneration that's built up over years ... it could
actually improve the business model but it depends how
fundamentally changed things are by any change in regulation,"
said the shareholder, who asked not to be named.
Jerry del Missier, who quit as Barclays' chief operating
officer on July 3, will be quizzed by UK lawmakers on the Libor
scandal on Monday.