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More UK banks probed for interest rate fixing scandal|
Thu Jun 28, 2012
British banks including HSBC and Royal Bank of Scotland are subjects of investigation for the alleged financial market manipulation that led to fines of £290 million against Barclays Bank, says the British Treasury chief George Osborne.
In a statement to MPs on Thursday June 28, Osborne said that the two British banks along with Switzerland's UBS and US bank Citigroup are also being probed for allegedly providing false figures on key interest rates upon which mortgages and consumer loans are priced.
Announcing that new criminal offences will be created to punish bankers guilty of misconduct, he added that the law needed tightening because interest rate manipulation at the Barclays scandal was not a criminal offence.
On June 27, the US and British regulators imposed the fines on Barclays for manipulating the key interest rate index, the London Interbank Offered Rate (LIBOR), to its advantage between 2005 and 2009.
Osborne criticized Bob Diamond, the chief executive of Barclays, saying Diamond had questions to answer about the events that led to the bank's record-breaking £290m penalties for manipulating key interest rates.
Welcoming the move by Andrew Tyrie, chairman of the Treasury select committee, to call Diamond to give evidence to MPs, Osborne said he wanted to know "what did he [Diamond] know and when did he know it?"
Diamond, who is facing calls to step down over the scandal, issued a statement apologizing for the events that have led to a 16 percent fall in the bank’s share price, saying, "Nothing is more important to me than having a strong culture at Barclays. I am sorry that some people acted in a manner not consistent with our culture and values."
Meanwhile, in a speech to the Unite union, Labour leader Ed Miliband, called for a criminal investigation into the setting of the interest rates, saying those responsible should face the "strongest punishment".
"When ordinary people break the law, they face charges, prosecution and punishment. We need to know who knew what, when, and criminal prosecutions should follow against those who broke the law," Miliband said.