Calls today came for the resignation of Bob Diamond the boss of Barclays Bank after the bank has been found to have adjusted the inter-bank lending rate – known as the The Libor rate (the average interest rate that leading banks in London charge when lending to other banks) to it’s own favour.
David Cameron says Barclays has “serious questions to answer” over Libor fixing and George Osborne describes the scandal as a “shocking indictment” of the banks amid calls for the bank’s chief executive Bob Diamond to resign.
George Osborne on Thursday threatened tougher sanctions for banks after Barclays was hit with a record fine for trying to manipulate a benchmark interest rate. Shares in Barclays fell more than 15 per cent at one stage, with Royal Bank of Scotland, Lloyds Banking Group and HSBC also down sharply.
Ed Miliband the labour leader has called for a criminal investigation to take place into the Barclays Bank rate fixing but it appears Barclays are not the only high profile bank that may be affected as many other high street banks may be guilty of irregular practice – including Lloyds Bank and HSBC
The FSA have said they are unable to take legal action against Barclays due their lack of power in dealing with this sort of action in terms of mortgage lending interest powers when they were formulated.
The coalition is already reforming the regulatory regime and dismantling the regulator, the Financial Services Authority.
Mr Osbourne dubbing the period from 2005 to 2007 “the age of irresponsibility”, he attacked the previous Labour government saying it was “literally clueless” when Barclays was manipulating Libor.