Fines for rivals ‘will put bank scandal in perspective’

The interest rate rigging scandal that has rocked 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 a memo.

They admitted that customers, clients, shareholders and regulators “all have a right to feel let down” after the bank was fined £290m by US and UK authorities for manipulating Libor interest rates.

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But the bank played down speculation it will sell or spin-off its investment bank or make an abrupt change in strategy.

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 Business”.

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.

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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 Mr Agius will leave once new leaders are picked.

The memo said the task now was to restore its reputation, including “building an overarching brand recovery plan”.

The scandal has also brought to light a strained relationship between Barclays and regulator the Financial Services Authority, which has concerned investors.

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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.”

Barclays is reported to be drawing up plans to pull out of the rate-setting panel for interbank lending in the United Arab Emirates because of its involvement in the Libor scandal in Britain.