Barclays credit rating falls from 'stable' to 'negative'
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Your support makes all the difference.Barclays suffered another blow, as credit rating agency Moody's said the wave of resignations over the Libor-rigging scandal meant it had moved its view on the bank's financial strength from stable to negative.
Standard & Poor's followed suit within hours, citing "the current management flux and near-term strategic uncertainty".
Chairman Marcus Agius resigned on Sunday night, but is now in charge of finding a replacement for chief executive, Bob Diamond, who quit on Monday, closely followed by chief operating officer, Jerry del Missier.
The exodus followed the £290m of fines imposed by regulators on both sides of the Atlantic over the Libor-fixing affair last week.
"Shareholder and political pressures on Barclays, which resulted in the resignation of the bank's CEO, COO (previously the head of the investment bank) and the stated intention of the chairman to resign, could lead to broader pressure on the bank to shift its business model away from investment banking and reform perceived failures in its business culture," Moody's said.
The agency believes "that the bank could be challenged to replace the three senior staff and in particular find a new CEO".
But Moody's made it clear that it was the "disruptive management changes" rather than the Libor investigations which could hit the bank's rating.
Barclays' current rating is just two grades above junk status.
Moody's said that it was likely to see further downward pressure "if the bank proved unable to restore a stable management structure over the coming months; or if there are indications that the current developments were to have a financial impact sufficiently large to put pressure on capital ratios and/or negative implications for the bank's business model".
Bill Winters, formerly of JP Morgan's, has overtaken Barclays' Antony Jenkins as the bookies' favourite to replace Bob Diamond.
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