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 In Britain, Leicester city council has said it had withdrawn more than £6m-worth of deposits in protest.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.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future