Other banks face bigger fines on rate fixing, warn Barclays directors
Barclays has hinted that other banks could face bigger penalties than the £290m fine it received over the interest-rate fixing scandal.
As one of the executives who resigned over the episode prepares to face a grilling today by MPs, senior figures in the bank have launched efforts to reassure staff and clients that it can withstand the damage to its reputation.
A memo to employees co-written by Marcus Agius, Barclays' outgoing chairman, and eight other directors of the bank suggested other financial institutions could be hit even harder by City watchdogs. "As other banks settle with authorities and various governments' inquiries shed more light, our situation will eventually be put in perspective," said the memo.
The Royal Bank of Scotland, Lloyds Banking Group and about a dozen other banks are being investigated in Britain, the United States and Japan for potential rigging of inter-bank lending.
Barclays suffered a fresh blow at the weekend following reports that American regulators are considering pressing charges against senior traders over rate manipulation. Fears that the furore could cost Barclays business internationally were underlined last week when a Japanese bank pulled out of a deal. In Britain, Leicester city council has said it had withdrawn more than £6m-worth of deposits in protest.
A prominent Liberal Democrat wrote last night to all MPs and peers to urge them to move their money from "scandal-hit high-street banks" to local, ethical or mutual financial institutions. Stephen Williams, who co-chairs the parliamentary party's treasury committee, said: "Only when they lose deposits, savings and customers will the chief executives pay attention."
MPs on the Treasury Select Committee will today continue their inquiry into the Libor-fixing scandal by questioning Jerry del Missier, who resigned two weeks ago as Barclays' chief operating officer.
MPs are likely to question him about an email he received from Bob Diamond, the bank's former chief executive, in October 2008 which has been interpreted as suggesting the Bank of England would sanction the "low-balling" of Libor. Mr Diamond has disputed this interpretation.
Lord Turner, the chairman of the Financial Services Authority, will face questions on whether the regulator was tough enough on rate-rigging. Sir Mervyn King, the Governor of the Bank of England will be asked tomorrow about emails showing he was alerted in 2008 to concerns about Libor by Timothy Geithner, then the president of the New York Federal Reserve.
Under suspicion: banks in the frame
Libor is based on the interest rate that 16 major international banks claim they must pay to borrow cash from other banks. Alongside Barclays, 15 other lenders, including Lloyds Banking Group and Royal Bank of Scotland, are now under investigation by authorities probing potential Libor rigging in Britain, the US and Japan. Banks across the City and in Wall Street are likely to become embroiled in the scandal as the investigations continue.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
'Sickening, deluded and unforgivable': Bloody attack brings terror to capital’s streets
German chancellor Angela Merkel named most powerful woman in the world by Forbes - again
World news in pictures
Eyewitness gives extraordinary account of her confrontation with Woolwich attackers
- 1 'Sickening, deluded and unforgivable': Bloody attack brings terror to capital’s streets
- 2 Mothers' diets may harm IQs in two-thirds of babies
- 3 Far-right French historian, 78-year-old Dominique Venner, commits suicide in Notre Dame in protest against gay marriage
- 4 Eyewitness gives extraordinary account of her confrontation with Woolwich attackers
- 5 Woolwich attack: The EDL might have a sinister plan as a soldier is murdered in suspected Islamic terrorist attack
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.