Barclays, RBS and LLoyds could face criminal investigations
Barclays, which has been fined £290m for misconduct by regulators in the UK and the US, could face criminal investigations, along with Royal Bank of Scotland and Lloyds Banking Group.
Barclays received the record fine for allegedly manipulating Libor, the London interbank lending rate, and Euribor, the European interbank lening rate.
The bank is believed to have given false information in order to raise or lower the Libor and Euribor interest rate measures.
This was designed to improve traders’ profits and to protect Barclays’ reputation by giving a positive view of its financial health.
Royal Bank of Scotland and Lloyds have also been accused of manipulating financial markets, according to court documents obtained by The Daily Telegraph and HSBC executive are also believed to be under investigation.
The scandal has led to the banks’ share plummeting in value, with Barclays’ share price falling by 15.5 per cent and RBS’s by 10 per cent.
The manipulation of lending rates is estimated to have cost consumers, investors and businesses £30 billion, with a large proportion of the losses incurred by pension funds and other investors.
Although Downing Street initially said the situation was purely a regulatory matter, Prime Minister David Cameron is now calling for those involved to be called to account for their actions.
In Brussels, Mr Cameron said: “I’m determined we learn all the lessons from what has happened at Barclays.
“People have to take responsibility for the actions and show how they’re going to be accountable for those actions.
“It’s very important that goes all the way to the top of the organisation.”
Chancellor of the Exchequer George Osborne has promised to introduce changes to legislation which would make it possible to bring criminal charges against those involved.
Bob Diamond, Barclays’ chief executive will have to answer questions over the issue at a Parliamentary Committee next week and could face dismissal.
The scandal is likely to seriously damage London’s reputation as a trusted international financial centre.