Banks face criminal probe threat
Jun 29 2012
Britain's biggest banks are facing the threat of a criminal investigation over the rate-rigging scandal that could cost the industry billions of pounds.
The Treasury has started to look at strengthening criminal sanctions for those responsible for market abuse after Barclays was fined £290 million by UK and US regulators for manipulating the rate at which banks lend to each other.
HSBC and taxpayer-backed Royal Bank of Scotland are among several other lenders being investigated by the City watchdog for fixing the interbank lending figures that affect millions of homeowners and small firms.
Serious Fraud Office investigators are in talks with the Financial Services Authority (FSA) over the scandal while pressure is mounting on Barclays chief executive Bob Diamond to stand down.
Barclays saw shares slide 15% - wiping £3 billion from its market value - as investors ditched the stock amid fears the fines could be dwarfed by lawsuits and damages. The banking sector is expected to remain firmly in the spotlight when the Financial Services Authority (FSA) discloses it has found evidence of mis-selling of complex financial products to small businesses.
Chancellor George Osborne told MPs the rate-rigging scandal was "a shocking indictment of the culture of banks like Barclays in the run-up to the financial crisis".
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