[ by Melanie Gretchen ] Barclays CEO Bob Diamond has (inadvertently) assumed the role of scapegoat, vacated by Chairman Marcus Agius who today resigned from Britain's 3rd-biggest bank.  Rather than placating the U.S. and the U.K. government, the Agius resignation increased the pressure for the ouster of Mr. Diamond, who was running Barclay's investment banking arm when the interest rate manipulation occurred. The Scandal. The bank has admitted that some of its traders tried to manipulate the London Interbank Offered Rate (Libor), for which it has paid U.S. and British authorities $453 million in settlement fees.  Nevertheless, John Mann, a Labor politician and a member of a panel of lawmakers who will question Mr. Diamond on Wednesday, and Agius on Thursday, has now set his sights on Mr. Diamond.  Upon his departure, Chairman Marcus Agius said "the buck stops with me."  Mr. Mann told Sky News.

"The buck in Barclays stops with Bob Diamond, and it is Bob Diamond who must accept responsibility.  He (Diamond) must resign.  He's got to go.  There is no role for people like him if banking is to be trusted again in this country and if British banking is to restore its tarnished reputation in the world, which of course is of great importance to our economy."

Broader Implications. Although the government's investigation includes a dozen other banks, including Citigroup, HSBC, UBS, and RBS – none of which have settled thus far – the bank may be the new source of public outrage.  [CI Note: Surpassing RBS, which shut millions of customers out of their accounts last month, and other banks, which mis-sold financial products to thousands of small businesses, would be no small feat.]

"Barclays has become the poster child for this because they have been the first to be assessed by the regulators.  I think this is going to spread far and wide through the industry." -- Euan Stirling of Standard Life Investments, a major investor which holds some 2 percent in Barclays, said on BBC radio.

Going forward, Barclays will launch an audit of its business practices, led by Michael Rake, its senior independent director, who will move up to deputy chairman.  It will conduct "a root and branch review of all of the past practices that have been revealed as flawed" and provide recommendations, which Mr. Diamond said would be implemented in full. Today, the CEO must take responsibility, a top-25 investor in the bank said, requesting not to be named:

"I still think it is going to be hard for Bob Diamond to keep his job. I don't think he has built up enough shareholder goodwill in the past to be able to ride this one out."

For further details, go to [CNBC, 7/2/12].