Barclays CEO Bob Diamond may have stepped down on Tuesday, following last week's London Interbank Offered Rate (LIBOR) scandal and derivatives mis-selling penalty, but the damages and challenges for the bank have only just begun.

Initial public and governmental response garnered unified relief that someone has taken "responsibility" for the spate of banking scandals and damaged relations between its customers.

"He's done the right thing," said George Osborne, UK Chancellor. "He's done the right thing for his bank. He's done the right thing for the country."

But the resignation of Diamond, which is one of the longest-standing executives at Barclays, marks the start of a whole host of challenges and legal issues to overcome.

Revolving Door

As if Barclays did not have enough bad publicity this week, the revolving door of senior management has caused more uncertainty surrounding the communication and organisation of Barclays top employees.

Barclays' chairman Marcus Agius was widely seen as a sacrifice, in lieu of calls for Bob Diamond to resign. On Monday he announced that he would resign immediately.

"It has been my privilege to serve as Barclays Chairman for the past six years," said Agius. "This has been a period of unprecedented stress and turmoil for the banking industry in particular and for the wider world economy in general. Barclays has remained resilient throughout the crisis, and has worked hard to ensure that today it is a strong, well capitalised and profitable business."

"But last week's events - evidencing as they do unacceptable standards of behaviour within the bank - have dealt a devastating blow to Barclays reputation. As Chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside," he added.

But the buck clearly did not stop with him.

In a surprise announcement on the UK's RSS feed and not on the bank's website, Diamond announced a resignation and in turn Agius "will become full-time Chairman and will lead the search for a new Chief Executive."

A spokesperson at Barclays confirmed that Agius' resignation "still stands" and this is just temporary while they find a replacement for Diamond.

Diamond is the last of the Big Three to step down. John Varley announced in September 2010 would step down as CEO and did so a year later.

But after flushing out the three Barclays leaders, will it mark a time for positive change and damage control for the bank or will this only be the start to another messy legacy?

Libor Scandal is Not Over

UK and US regulators slapped Barclays with a record £290m fine for fixing key interest rates Libor and Euribor, over several years but the saga is not over.

Three of Britain's biggest lenders, RBS, Lloyds and HSBC are among the 17 banks and one broker that are being investigated, following Barclays' involvement in fixing two of the most important interest rates in the global financial markets and Barclays collusion with other banks will still be investigated.

The heat is also being turned up by investigators and MPs, as the Serious Fraud Office confirmed that it is looking into potential breaches of the Fraud Act and is "considering whether it is both appropriate and possible to bring criminal prosecutions".

As if sacking the bankers that were involved in the Libor rigging scandal was not enough, they could still all face criminal prosecution.

Osborne announced bankers could face jail under new laws to be rushed through parliament, as "urgent changes" are needed in relation to the regulation of the Libor.

Moreover, although Diamond has stepped down, he could be facing criminal proceedings, if the Sarbanes Oxley 2002 act is filed against him.

The Sarbanes-Oxley Act 2002 was written into legislation as a way of protecting investors by improving accuracy and reliability of corporate disclosures and create new standards for chief executive and chief financial officer responsibilities and accountabilities and therefore removes the defense of "I wasn't aware of the situation."

The Act was ratified after the collapse of Enron and WorldCom devastated the wider financial markets on cooking the books and major fraudulent acts.

Huge Compensation Payouts with Mis-selling Derivatives?

As the Libor scandal grows into more disarray, there is monetary impact from other news in the same week, the mis-selling of derivatives, could prove to be a costly headache for Barclays.

After an intense investigation by Financial Services Authority (FSA), the UK regulator found "serious failings in the sale of interest rate hedging products to some SMEs."

"We believe that this has resulted in a severe impact on a large number of these businesses. In order to provide as swift a solution to this problem as possible we have today confirmed that we have reached agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate redress where mis-selling has occurred," said an official statement.

To be exact, a "large number of businesses" actually means 28,000 customers since 2001.

Over the past year, IBTimes UKreported that hundreds of small to medium enterprises (SMEs) are turning to specialist lawyers from overseas to help them wrangle their way out of what they believe are mis-sold complicated financial contracts, sold as loan protection products, that are now suffocating them financially.

The groundswell comes alongside Barclays' chief executive Bob Diamond's admission that the bank "made some mistakes" in the market for interest rate products during the bank's last annual general meeting.

Diamond, whose bank has now been found guilty of mis-selling interest rate swaps and had the most banking customer complaints in 2011 according to the FSA, said: "There was a worry about interest rates going higher in 2005, particularly in the property sector where consumers wanted to lock in interest rates. I can guarantee you we have made some mistakes, when we have a mistake we're going to own up and fix it."

The announcement echoes the payment protection insurance (PPI) scandal that emerged in 2011.

A damning indictment of some of the industry's practices last year, following a six-year probe by the FSA in to the selling of PPIs resulted in a potential £10bn in compensation claims.

So far the UK's five biggest lenders have set aside £10bn to cover PPI claims, making it one of the most costly consumer scandals ever.

In terms of the mis-selling of derivatives, if Barclays has the record number of complaints and has been found guilty of serious failings in selling interest rate structured "collars" to retail customers, which have included fish-and-chip shops and family-owned electrical goods stores, then the payout could be huge - although no official estimate or amount set aside has been confirmed.

Barclays HSBC London