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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.
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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