This article was last updated on April 16, 2022
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Chancellor, George Osborne has told that Serious Fraud Office investigators are speaking with the City watchdog over the Barclays rate-fixing scandal that has shaken the banking industry.
Mr. Osborne told MPs the affair was “a shocking indictment of the culture of banks like Barclays in the run-up to the financial crisis”.
He said that the Financial Services Authority (FSA), which along with US regulators landed Barclays with a £290 million fine for manipulating the interest rates at which banks lend to each other, was holding talks with the Serious Fraud Office (SFO). He has also added that Barclays was “not alone” in efforts to rig a key interest rate benchmark. Still, Barclays “had serious questions to answer” as pressure mounted on chief executive Bob Diamond to step down.
Shares in Barclays plummeted 17%, wiping £4 billion off its market value, while taxpayer-backed Royal Bank of Scotland dropped 14% as Mr. Osborne said several global banks like HSBC, UBS and Citigroup are also being investigated.
Mr. Osborne added: “It is clear that what happened at Barclays, and potentially other banks, was completely unacceptable, was systematic of a financial system that elevated greed above all other concerns, and brought our economy to its knees.”
Mr. Chancellor has turned to Mr. Diamond, who waived his bonus for 2012 in light of the scandal, and said: “As far as the chief executive of Barclays is concerned, he has some very serious questions to answer today. What did he know and when did he know it? Who in the Barclays’ management was involved and who, therefore, should pay the price?”
Mr. Osborne will look to strengthen the criminal sanctions available to the financial regulators and will possibly amend the Financial Services Bill.
Opposition leader, Ed Miliband called for a criminal investigation into the scandal and said. “This cannot be about a slap on the wrist, a forgoing of bonuses, a fine and that’s the end of the matter.”
Prime minister, David Cameron advised: “People have to take responsibility for the actions and show how they are going to be accountable for those actions and that’s very important that goes all the way to the top of that organisation.”
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