Barclays, HSBC and Royal Bank of Scotland face US Libor inquiry
The rate-rigging scandal that has rocked the banking industry showed no signs of abating today as US authorities summoned three British banks for questioning.
Royal Bank of Scotland, HSBC and Barclays were among seven banks handed legal notices demanding that they assist in an inquiry by the attorneys general of New York and Connecticut.
The move raises fears over future penalties and further damage to the already battered reputation of Britain's banks, with several other legal cases in multiple countries looking at the manipulation of Libor.
Ian Gordon, analyst at brokers Investec, said there was "plenty more reputational damage and regulatory fines coming down the pipe" but added the issue was now largely "in the past" for Barclays.
Shares in the banks were broadly unaffected by the development, which comes after Barclays was fined £290 million by UK and US regulators for manipulating the Libor, a key interbank lending rate that affects mortgages and loans.
Barclays declined to comment, while HSBC and RBS both referred to statements made with their half-year results acknowledging ongoing investigations.
Details of the subpoenas were not given, but the legal notices are effectively requests for information backed with the force of the law.
Libor - the London interbank offered rate - is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.
Overseen by the British Bankers' Association, Libor is a self-policing system that relies on information global banks submit themselves.
Barclays admitted that it submitted figures that were lower than accurate for its interbank borrowing, including during the financial crisis in the fall of 2008, making Barclays appear healthier than it was.
A number of Barclays employees also submitted false rates in a bid to line their own pockets, according to the findings of the Financial Services Authority.
UBS filed a report with regulators on July 31 saying that agencies, including state attorneys general, were examining whether it and other banks had tried to manipulate the rate. Citigroup and JPMorgan Chase also declined to comment.
Last week Sir David Walker - the City grandee who oversaw a review into bank governance for former prime minister Gordon Brown - was unveiled as the new chairman of Barclays.
Sir David will join as non-executive director from September 1 before succeeding chairman Marcus Agius, who announced his intention to resign in the wake of the Libor-rigging scandal.
He said his priority was finding a new chief executive after the affair claimed the scalp of Bob Diamond.
- 2 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 3 University student in court for allegedly covering housemates' food in window cleaner and spit
- 4 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
General Election 2015: Photographic history of Bullingdon Club tracked down - including new picture of David Cameron in his finery
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...