Exclusive: Grandees To Head Barclays Probe

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The City grandee who led a review of corporate governance at Britain’s banks in the aftermath of the financial crisis is being touted to oversee a probe of the ‘wild west’ culture at Barclays’ investment bank, I have learnt.

People close to Sir David Walker, one of the financial sector’s most respected figures, have signalled that he would be interested in chairing an independent review at Barclays (LSE: BARC.L - news) following the scandals which have plunged the bank’s boardroom into crisis.

Leading shareholders have in the last 24 hours demanded that the board of Barclays, led by Marcus Agius, the chairman, and Sir Mike Rake, the senior independent director, commit to an independent review of events at the bank.

Another candidate for the supervisory role would be Lord Davies, the former trade minister and ex-chairman and chief executive of Standard Chartered (Xetra: 859123 - news) , the emerging markets-focused bank. He, too, is understood to be open to an approach from Barclays investors.

Barclays was fined £290m this week by regulators in the UK and US for rigging the key benchmark interest rate LIBOR and along with other banks was named by the Financial Services Authority (FSA) this morning as being culpable in the mis-selling of interest rate swaps to small businesses.

One shareholder in Barclays told me this morning that Davies and Walker were both “credible” names to oversee such a review, although it remains unclear whether the bank would agree to such an unprecedented probe.

The two men are likely to be sounded out by investors in the coming days. Walker has more time to oversee a review following the failure of a new bank acquisition vehicle to secure a deal to buy 632 Lloyds Banking Group (LSE: LLOY.L - news) branches. His credentials include acting as the independent reviewer of the FSA’s inquiry into the collapse of Royal Bank of Scotland (LSE: RBS.L - news) , published last December.

Bob Diamond, Barclays’ chief executive, faces a battle to hang onto his job following the emergence of the LIBOR scandal although some investors believe that removing him at a time when the bank’s balance sheet is so heavily-exposed to the Eurozone would be a disastrous move.