By Simon Miller

Rating agency Moody's has downgraded Barclays' standalone outlook rating from stable to negative over concerns about the leadership of the bank.

Moody's said that following the resignation of chief executive Bob Diamond and chief operating officer Jerry del Missier in the wake of the Libor manipulation scandal and the consequent uncertainty surrounding the firm's direction were negative for bondholders.

"Specifically, the 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," the agency said.

It continued: "Although this could have potentially positive implications over the longer term, the uncertainty surrounding such a change in direction is credit negative in the short term."

Moody's added that the bank could be challenged to replace the three senior staff and in particular find a new CEO who "not only has a sufficient understanding of the investment banking business to run Barclays, but also has the credibility and ability to swiftly address the weaknesses that the Libor incident revealed and stakeholders' perceptions of the investment bank".

However, it added that concerns were mitigated to some extent "by Barclays's broad and strong management team, which provide the firm with stability and continuity whilst a new CEO and subsequently a Chairman are appointed, and limit the scope of today's action to a change in outlook".

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