By Benjamin Chiou
Date: Monday 02 Jul 2012
Chancellor of the Exchequer George Osborne said that a review into the way that interbank lending rates are determined is to take place, following last week’s revelation that Barclays had been manipulating Libor for its own benefit.
It was revealed on Wednesday that Barclays is to pay a £290m fine to UK and US regulators after it was found attempting to control submissions for the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR). Libor and the Euribor are benchmark reference rates that indicate the interest rate that banks charge when lending to each other.
Osborne, speaking to parliament on Monday, said that Martin Wheatley, the Chief Executive designate of the Financial Conduct Authority would be carrying out the Libor review and will report his findings this summer.
Prime Minister David Cameron said that the government will "establish a full parliamentary committee of inquiry involving both Houses chaired by the Chairman of the House of Commons Treasury Select Committee.”
"This inquiry will take evidence under oath have full access to papers, officials and Ministers - including Ministers and Special advisers from the last government and it will be given, by the government, all the resources it needs to do its job properly."
He said that the Serious Fraud Office is looking at whether criminal prosecutions are needed; “they are using the full force of the law in dealing with this,” he said.
“The British people want to see two things. That bankers who act improperly are punished. And that we learn the broader lessons of what happened in this particular scandal,” Cameron said.
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