British banking giant Barclays sacrificed its chairman, Marcus Agius, Monday in a veiled effort, it would seem, to head off complaints against its chief executive.
The bank said Agius would resign.
Prominent voices in Britain, including the head of its treasury and the prime minister, declared last week that Barclays' Libor scandal required a serious response.
Regulators had already fined the bank $450 million for attempting to manipulate the Libor, which is the London inter-bank offer rate -- the interest banks charge when borrowing money from each other.
Reporting a low interest rate makes a bank appear financially healthier than it really is. In addition, the Libor is used as a benchmark that establishes interest rates on various consumer and business loans, Knowing where it is headed is a distinct advantage to derivative traders.
Last week, Barclays announced that in addition to the fine, its four top executives would forgo their bonus pay for 2011.
Clearly, however, Chief Executive Officer Bob Diamond has taken his cue directly from JPMorgan Chase CEO James Dimon, who recently declared his bank made mistakes under his watch, but then said he was the best person to make the necessary corrections.
From an organization's point of view, this makes better sense than one might think, but from the public's point of view this falls short of a responsible reaction to such enormous scandals.
In JPMorgan Chase's case, unwise trading led to losses that were first reported as $2 billion.
Whether Dimon knew at the time he was lying and telling the truth simultaneously may never be known. The bank had made mistakes -- he was right. But the losses could turn out to be nearer to $9 billion than $2 billion.
More recently, Barclays has already been fined $450 million for trying to manipulate the Libor. But regulators underestimated the public's reaction. Politicians quickly called for CEO Diamond to resign.
The Libor case is curious. Once again, bankers have very clearly crossed the line and yet, once again, there is an e-mail trail as wide as the Thames for regulators to follow.
This doesn't mean that bankers had no clue that what they were doing was wrong. It hints they have no fear of regulators. But to truly be this unafraid of regulators and to have that brazen attitude be so pervasive does not just suggest bankers don't think they'll get caught. It suggests they don't care if they get get caught. Why? Because these glitches to a bank are just the cost of doing business.
Barclays was fined $450 million for attempting to manipulate the Libor. In any real business, not only would Diamond be fired, but so would about 600 other employees. There should be so much business for moving companies in London this week that a military response just to move filing cabinets should be in order.
Not in the world of banking.
At Barclays, the chairman was sacrificed, which is the smallest possible number of personnel replacements possible. Agius probably wanted to go fishing, anyway. While everyone is sorry he had to leave under a cloud, it seems likely Barclays is doing nothing more than continuing to play the game.
In international markets Monday, the Nikkei 225 index in Japan was flat, off 0.04 percent and the Shanghai composite index in China gained 0.03 percent. The Hang Seng index in Hong Kong rose 2.19 percent and the Sensex in India lost 0.18 percent.
The S&P/ASX 200 in Australia gained 0.94 percent.
In midday trading in Europe, the FTSE 100 index in Britain rose 0.6 percent while the DAX 30 in Germany climbed 1.27 percent. The CAC 40 in France added 1.34 percent nd the Stoxx Europe 600 gained 1.2 percent.