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Osborne to 'examine' criminal charges against Libor abusers

(Update) Chancellor says Barclays boss Bob Diamond must explain his role in the bank’s manipulation of market interest rates.

Osborne to 'examine' criminal charges against Libor abusers

Chancellor George Osborne has raised the pressure on Barclays (BARC.L) and Bob Diamond, saying the chief executive must explain his role in the bank’s manipulation of market interest rates.

‘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?’ Osborne told parliament.

The chancellor was speaking after Barclays was yesterday fined a combined £290 million by US and UK regulators over the manipulation of the Libor and Euribor market interest rates.

Amid growing political pressure and an ongoing investigation over banks' Libor manipulation, Osborne said that he was exploring ways in which criminal action could be brought.

‘As part of our review into Libor and the strength of the financial regulatory architecture, we will examine if there are any gaps in the criminal regime inherited by this government and we will take the necessary steps to address that.

‘I cannot comment today on possible criminal investigations for individuals involved in this activity.’

He would need to strength the FSA’s abilities to impose criminal sanctions:

‘The authorities are exploring every avenue open to them but the scope of the FSA’s criminal powers granted by the previous government does not extend to being able to impose criminal sanctions for manipulation of Libor,’ he said.

Osborne added that he expects the number of individuals under formal investigation in the Libor probe to increase and that he needs to find out who in Barclays management was involved in the probe.

The chancellor described the email exchanges between Barclays traders outlined in yesterday’s FSA notice as reading like ‘an epitaph from an age of irresponsibility’.

His comments come after Labour leader Ed Miliband said rather than just a fine and senior executives relinquishing bonuses, banks should face the ‘full force of the law including criminal prosecution’.

Speaking at a Unite union conference in Brighton this morning, Miliband said: ‘Millions of pounds are being made but they are bending the rules, rigging the system to the cost of ordinary borrowers and savers.’

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9 comments so far. Why not have your say?

Alan Tonks

Jun 28, 2012 at 13:20

Well I would have thought that the ones with the sin cannot cast the first stone. The last Labour Government should have had criminal proceedings taken against them. This apart from treason charges so I think the so “whiter than white” Ed Millipede should keep his mouth closed.

If the stones thrown at the criminals related to their crimes, the Labour party would have had Mountains thrown at them. This is one person that hasn’t forgotten how disgustingly foul the last Labour Government was.

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Brian Kneller

Jun 28, 2012 at 14:04

I sincerely hope that criminal action is brought against the senior management of Barclays and any other bank involved with this fraud. This clearly shows that banks have the capacity to discard any sense of professional and moral judgement in the pursuit of protecting their own position. The question needs to be asked why? Is this motivated purely by greed or have the governments and the long suffering tax payers still to see the full damage the banks have caused?

Clearly some banks are unable to operate in an honest and equitable manner, they need to be forced to operate in a way acceptable to the rest of society and industry. We an opportunity because the tax payer owns a bank, this should be structured to separate the casino from the saver and the FSA should remove the £85K protection from Barclays and the like because they are clearly operating at risk and why the h...ll should be back fraudsters ?

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Neil Liversidge

Jun 28, 2012 at 14:20

I've sat and listened in amazement to the reports of how Barclays rigged LIBOR. But nobody looks like going to jail. Why? I'm sure many must like me be wondering why they're not seeing bankers in handcuffs doing the Perp Walk.

Because this is the bankers' equivalent of Apalachin.

For those of you who are not necessarily mafia aficionados I should explain that the Apalachin Meeting was a summit of American mafia bosses held at the home of mobster Joe Barbara in Apalachin, New York state, in 1957. Unfortunately for them an alert local cop effectively exposed the long-denied fact - a lie supported by the FBI no less - that there was a nationwide conspiracy by rich and powerful crime bosses to enrich themselves at everybody else's expense. And now we see exposed a conspiracy by rich and powerful bankers doing guess what? Enriching themselves at everyone else's expense.

They don't control garbage hauling or construction contracts or the Fulton fish market like the mob used to - that's peanuts for Barclays. They influence interest rates and if you can influence interest rates you can make an awful lot of money. And nobody should be deluded that this is a victimless crime. The LIBOR rate was crucial to taxpayer support for banks. We paid for that and we'll go on paying and our kids will pay too. LIBOR determines what millions of people pay for loans. I have clients whose business loans are directly linked to LIBOR. Their livelihoods depend on the honesty with which that rate is fixed.

There's a quote in The Godfather - A lawyer with his briefcase can steal more than a hundred men with guns. That's why Don Vito Corleone wants his adopted son Tom Hagen to be a lawyer. But you know what I reckon? If Mario Puzo was writing The Godfather today, Don Vito Corleone would be busy making sure Tom Hagen and all his sons made their careers in banking.

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Jun 28, 2012 at 16:51

Alan, “whiter than white”, you are surely joking. Ed was part of the inner sanctum before he became an MP and would have known what was going on and being done, not only by cyclops, but also by spherical objects.

The great pension robbery could hardly have escaped his attention, as well as the PFI rip off. Yet whiter than white, with all his knowledge of his crimes, those of cyclops and spherical objects he nevertheless allows spherical objects to pontificate on the now all too obvious results in the media, and to critique this govt because of the results of the crimes he was complicit in and to demand criminal proceedings However, he is happy to employ obvious criminals in his shadow cabinet, including that female barrel maker who defrauded the nation, blatantly, on their expenses.

Yes by all means bring charges against the bwankers, and will those in charge now bring prosecutions against the criminals and their 'advisers' who created the mess in the first place?

BTW, let us not forget those now benefiting from the proceeds of crime committed by the aforementioned. They should not be exempt from prosecution.

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Jun 28, 2012 at 19:00

I wonder if Osborne is being influenced by the blogs and the comments boards? Every media article about this scandal which has a comments board has had literally hundreds of posts, almost all saying the same thing - these people have got to be jailed otherwise it's obvious that there's one law for the banksters and another for the rest of us. Please everyone keep the pressure on. Fines mean nothing to these people - the only thing that frightens them is jail. If you think jail is the right place for these people to be then please keep putting your comments on the boards - there's just a chance these are being read in the right places.

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Graham Whiffen

Jun 28, 2012 at 19:38

Business as usual !!!!!

The politicians, as usual are jumping on the bandwaggon to grab the moral ground in their now very familiar fashion of conning us prols into believing they give a toss for anything other than cheap vote grabbing.

Mr Balls, being probably the most transparent of indignant blowhards, is usualy a good guide to taking the opposite opinion. No direction of blame of course, just rhetoric.

However, if this business is financial malpractice, it is a matter for the courts. If there is criminal liability, responsibility should be on the shoulders of the guilty people who committed the acts and those who knowingly allowed, abbetted or encouraged it to occur.

This business of fining the shareholders (the PLC itself) is rediculous. Thus some already hard pressed pensioner, already robbed of 5% of their investment portfolio returns by the previous administration (much decried but not reversed by our current government by the way), pays the cost of fines by lost dividend interest or share value.

We used to have a legal system that required 'guilty knowledge' for a person to be convicted of worng doing. Now you only need to have honestly invested in a National company, and have to have trust without control, in those directing its conduct, to be guilty and suffer financial penalty.

Just what the hell is wrong with punishing the guilty and protecting the innocent. Is this just too novel an idea for this 'modern' world.

Words now fail me !!!!!

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Rob Walker

Jun 28, 2012 at 19:45

The real crime has been committed by the regulatory authorities - when did they first know this was going on? 3,4, 5 years ago? The politicians throw the rocks at Barclays because

a) they are not government owned so let them take the flack first. The other banks will be named when this is old news.

b) Government is responsible for regulation, and neither the current or last government have produced a coherent action plan to give us a proper framework of controls. Even today, Cameron said 'we will take further measures if they are necessary' - er, excuse me but how far behind the curve are you Mr C? The LIBOR fixing loophole was known about when this investigation started, so what contols were introduced in 2009, 2010 2011 to stop this fraud being possible? Did you all have to wait for a prosecution?

Anyone from the FSA out there wishing to respond?

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Raymond Randalle

Jun 28, 2012 at 22:35

I hope Criminal action is brought against all the Banks who have practiced the art of Creative and false accounting, fraud and manipulation of facts and figures.

I feel as do so many of us, however, that it is not just the banks that are to blame, but the colluding Governments and Judiciary who ignore and turn a blind eye to the fraudulent and wreckless behavior of the Banks.

This is why the Bankers are going unpunished, why the SFO does nothing, finds nothing, sees nothing.

This is why the world is in such a mess and this is the reason for the world financial crisis.

It is only the victims of this endless abuse, who can protest loud enough to expose the criminals ant their accomplices.

We must stand up to these cowards and put an end to the bullying banks who think they are above all laws.

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Jun 28, 2012 at 23:41

Raymond, it is not the companies that committed the crimes, it is those that make the decisions in the name of the company that decided to act or or deceive so you are right, it is the individuals that should pay the fine, but then the yanks need the money to stave off the tsunami that will shortly overwhelm them because of their failure to tackle their higher than Everest debt mountain, and growing by the minute, in other words individuals should be paying and doing time.

And, in the words of Roosevelt, the buck stops with them at the top, it happened on their watch, and over a long period of time, so there is no excuse.

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