AS BARCLAYS 's top management all fell on their swords in a matter of hours, the chairman of Britain's Financial Services Authority (FSA) warned other banks would face scrutiny and urged them to purge their culture of "cynical entitlement".
The FSA's probes into attempts to manipulate the London interbank offered rate (Libor) and other similar benchmarks would result in more settlements "before the end of the year", FSA chairman Adair Turner said yesterday.
They require significant resources and caused a huge blow to the nation's banking industry's reputation, he said.
His comments came hours after Bob Diamond stepped down as Barclays' CEO and shortly before the bank also lost its chief operating officer Jerry del Missier. Chairman Marcus Agius resigned on Monday after the bank's admission that it had submitted false Libor information to benefit derivatives trades and bolster its own positions. Barclays, Britain's second-biggest lender by assets, was fined a record $451m in UK and US probes last week.
"The cynical greed of traders asking their colleagues to falsify Libor submissions so that they could make bigger profits has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis," Mr Turner said.
Chairman of the FSA since 2008, Mr Turner recommended that the board of Barclays think about the "challenge they faced in enacting sufficient culture change to put the problems of the past behind them", adding that he "respects and understands" Mr Diamond's decision to resign.
Libor investigations are at various stages "reflecting the co-operation of firms and their willingness to settle", he said.
The British financial services industry faces "a crisis of trust and reputation" after a series of mis-selling scandals, Mr Turner said.
Last week, Barclays, Royal Bank of Scotland Group, Lloyds Banking Group and HSBC Holdings all agreed to compensate small and medium-sized businesses improperly sold interest-rate derivatives. Mr Turner spoke yesterday at a conference announcing the London regulator's last annual report before it is split into two separate bodies next year.
Mr Turner has a history of complaints about the industry he regulates. "There are no free lunches, and shoddy wholesale practice is not a victimless act, even in those cases where it is not defined as a crime," he said yesterday.
Martin Wheatley, designated to be CEO when part of the FSA is split into the Financial Conduct Authority, will conduct an inquiry into how Libor functions.
The inquiry will look into whether Libor setting should be regulated, whether actual trade data can be used to set the benchmark, and "the adequacy of the UK's current criminal and civil sanctioning powers with respect to financial conduct, and market abuse with regard to Libor".
The FSA is also due to report on banking conduct in other markets for wholesale financial products by October.