Barclays Finalises Inquiry Terms

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Barclays (LSE: BARC.L - news) will commit an unlimited budget to an independent probe into its business practices in an attempt to convince stakeholders that its involvement in the Libor-rigging scandal can never be repeated.

I understand that Barclays’ board is meeting formally today for the first time since the resignation of Bob Diamond last week.

Leading the items on the agenda, unsurprisingly, is the recruitment of a new chairman and chief executive. People close to the bank tell me that Sir John Sunderland, the non-executive director leading the search for Marcus Agius’s successor as chairman, has appointed MWM Consulting, a leading City headhunting firm, to advise the board. Spencer Stuart, another search firm, is helping to recruit Mr Diamond’s successor.

The terms of reference of the inquiry into the bank’s culture – announced the day before Mr Diamond quit under pressure from Sir Mervyn King, Governor of the Bank of England – are expected to be finalised this week.

Sir Mike Rake, Barclays’ deputy chairman, is understood to have begun detailed talks yesterday with a number of candidates to lead the probe. I’m told that Sir Richard Lambert, former head of the CBI, has not yet been approached, although his name is on a list drawn up by Barclays’ executives. An announcement is likely within days.

The inquiry will include access to large amounts of internal correspondence at the bank, including emails between current and former executives. Barclays announced last week that the probe would lead to a new code of conduct and a public report.

It follows criticism by the City regulator of Barclays' business practices and culture in correspondence earlier this year between Lord Turner, chairman of the Financial Services Authority, and Mr Agius.

Directors are also understood to be discussing today the severance package of Jerry del Missier, who resigned as chief operating officer following the disclosure of his role in communicating instructions to Barclays traders to submit artificially-low Libor submissions in 2008.

Barclays declined to comment.