LONDON, July 11 (Reuters) - Top Barclays Plc shareholde
rs fear that regulators will rush through the appointment of a new chief of the scandal-struck bank and not take the time to search for an outsider to bring about a root-and-branch culture change.
The bank has started sounding out larger shareholders, who have urged it to look for external candidates to fill the two top jobs at the bank.
The shareholders have expressed concern that financial regulators, eager to limit long-term damage caused by a lack of leadership at the bank, are pressing for quick appointments.
'We feel they are going to get pushed by the regulator to make these appointments quite quickly so that would lead them to look to internal candidates,' one top-10 investor said.
British newspapers reported on Thursday that the bank wants to quickly appoint its deputy chairman, Michael Rake, as its new chairman and is preparing to present the case to the Bank of England and the Financial Services Authority,
Rake has reportedly told investors he will stand down from his role as chairman of both BT and easyJet to concentrate on the chairman's role at Barclays, if it is awarded.
Barclays is looking for new blood after it became the first, and so far only, bank to admit errors in a global rate-rigging scandal that has led to the departures of Chief Executive Bob Diamond and Chairman Marcus Agius.
The scandal has enveloped a dozen or more banks across the world, which are being probed over whether they manipulated the London Interbank Offered Rate (Libor), a benchmark that underlies hundreds of trillions worth of financial contracts.
Chief Operating Officer Jerry del Missier has also left. External appointments would help draw a line under the Libor fixing scandal, the shareholders said.
A second large investor who has had meetings with Barclays board members told Reuters that the Financial Services Authority (FSA) and the Bank of England had urged the board to 'get their house in order as quickly as possible,' ideally appointing a new chairman and chief executive within the next 3 months.
Barclays and the Bank of England declined to comment. The FSA did not immediately respond to a request for comment.
Possible external replacements named by analysts to replace Diamond include Bill Winters, who previously ran J.P. Morgan's investment bank in Europe.
The second investor also told Barclays that while he would be comfortable if the chairman were an internal candidate, the appointment of the chief executive had to be an external one.
'It will be much easier for Barclays if they appoint (deputy chairman) Mike Rake as chairman, let Marcus Agius go and then get on with the process of finding a new chief executive officer.
'The idea is have someone who can breathe fresh air into the board and I think Mike can do a good job. He is concerned about the reputational damage and he is the right person for the job as he has had lots of experience dealing with prickly people - he is also the chair of EasyJet.'
Another shareholder told Reuters that it was essential for the bank to hire externally for both the chairman and chief executive roles on the basis that an excessively aggressive culture at the bank needs to be addressed.
'That is quite a serious matter because most businesses cannot survive if they perpetuate such a culture ... the taint extends to all those involved in it.'
'The problem is that some of the suggestions (for CEO) are too close to the previous regime. It would have to be someone with no connection to the previous regime.'
'The very basis of old City of London was uberrima fides which is Latin for 'utmost good faith,' and that is what is being denied by the culture of Barcap, which is what has become the dominant culture of the Barclays Group,' the top-30 shareholder said.
(Reporting by Chris Vellacott, Additional reporting by Stephen Mangan; Editing by Elaine Hardcastle) Keywords: BANKING LIBOR/BARCLAYS
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