--Departing chairman says bank's reputation took devastating blow
--Bank launches audit of business practices
--Pressure intensified on Barclays executives following Libor scandal
(Adds detail and BBA comment in paragraphs 2 and 5.)
By Jessica Hodgson and Max Colchester
LONDON--Barclays PLC (BCS) said Monday that it would launch an independently led audit of its business practices as Chairman Marcus Agius confirmed he would resign, taking responsibility for last week's $453 million settlement of an interest-rate manipulation probe.
As both chairman of Barclays and the trade association that oversee the interbank lending rate, Mr. Agius has been the focus of much criticism from investors and politicians over the past week. On Monday, Mr. Agius sought to deflect pressure from bank Chief Executive Robert Diamond, saying that the "buck stops with me." He also stepped down as chairman of the British Bankers' Association, the trade body runs the Libor rate.
"Last week's events, evidencing as they do unacceptable standards of behaviour within the bank, have dealt a devastating blow to Barclays' reputation," Mr. Agius said in a statement Monday.
"As chairman, I am the ultimate guardian of the bank's reputation." The bank said the audit will be a "root and branch review of all of the past practices that have been revealed as flawed since the credit crisis started and identify implications for our business practices and culture going forward." Mr. Agius will stay on at the bank until his successor is found.
The resignation comes as the U.K government ratchets up pressure on the bank's management following revelations that the lender tried to fix the interbank lending rate during the height of the financial crisis. On Monday afternoon, U.K Chancellor George Osborne is expected to announce an inquiry into Libor that will consider whether fixing the benchmark rate could become a criminal offence.
It remains unclear whether Mr. Agius' departure will be enough to divert pressure from Mr. Diamond, Barclays' CEO, who has also faced calls for his resignation, and to allow Barclays to draw a line under the damaging story.
Barclays was the first among a group of global banks being investigated to reach a settlement with regulators on two sides of the Atlantic over the manipulation of the so-called London Inter bank Offered Rate, commonly known as Libor.
In the settlement with the U.K.'s Financial Services Authority, the U.S. Commodity Futures Trading Commission and the U.S. Department of Justice's fraud section, Barclays admitted that executives and traders tried to manipulate this interest rate.
Libor rates are calculated for different currencies each day under the auspices of the British Bankers' Association, using quotes that are submitted by banks on a panel, based on the banks' estimated borrowing costs.
More than $800 trillion in securities and loans are linked to Libor, including $350 trillion in swaps and $10 trillion in loans, including auto and home loans, according to the CFTC.
No other banks or individuals have been charged with wrong-doing.
Banks that have disclosed they are being investigated include Citigroup Inc. (C), Deutsche Bank AG (DB), HSBC Holdings PLC (HBC), J.P. Morgan Chase & Co. (JPM) and Royal Bank of Scotland Group PLC. (RBS).
Swiss bank UBS AG (UBS) has said it has been granted partial immunity by certain regulators, including the U.S. Justice Department, in return for cooperating with the investigation.
Barclays said that Sir Michael Rake would become deputy chairman and Sir John Sunderland, an existing board member, would head a search for a replacement chairman.
Barclays shares were up 3.68% to GBP1.69 at 1212 GMT.
-Write to Jessica Hodgson at jessica.hodgson@dowjones.com
(Max Colchester and Sara Schaefer Munoz contributed to this article.)
