Libor scandal – the net widens

Former Barclays' employees could also be questioned by parliamentary banking inquiry

Parliament's banking inquiry is to examine claims that former Barclays employees were involved in rigging interest rates at other institutions.

MPs and peers are understood to be concerned about revelations from the Financial Services Authority that many of those involved in fixing the Libor rate used to work at Barclays, which was fined £291m for its involvement and saw its chief executive, Bob Diamond, quit earlier this month.

Libor is the average interest rate at which banks say they would lend to each other. It is set through regular submissions to the British Bankers' Association and forms the basis of lending rates the world over, so if one or more of the banks change their submissions the average moves, altering the market.

Traders were found to have put pressure on the Libor "submitters" to change the Libor rate to help mask losses and help improve their own financial positions. Barclays has been the focus so far, but it is known that banks across the City and Wall Street, from Lloyds Banking Group to JP Morgan, are likely to be pulled into the scandal.

The FSA report into the scandal found that traders at other banks also asked Barclays submitters to change their numbers. It states: "At least 12 of the US dollar Libor requests made to Barclays submitters were made on behalf of external traders that had previously worked at Barclays and were now working at other banks."

In a separate passage, there were a further 11 requests from just one trader who used to work for Barclays. John Thurso, the Lib Dem MP named last week as a member of the Parliamentary Commission on Banking Standards, said the revelations were "clearly a cause for concern and should be looked into".

The revelation suggests that there was a culture of rate-rigging in the investment banking division that Mr Diamond ran during the focus of the investigation, from 2005 to 2009, which might have been the cause of Libor-fixing spreading elsewhere.

A source close to the Treasury Select Committee said: "One of the questions that still needs to be answered is if this was some sort of virus that was spreading through the system from Barclays when people left to go elsewhere, or was it just a dealing room where people were using their old contacts, be it at Barclays or anywhere else?"

This week, the committee will question the Bank of England governor, Sir Mervyn King, on reports that he knew of the possibility of Libor manipulation as long ago as 2008. Emails released in the US showed that Tim Geithner, who is now the US Treasury Secretary but at the time was Sir Mervyn's counterpart at the New York Federal Reserve, warned that there might be "deliberate misreporting" of Libor.

Sir Mervyn is due to be questioned over the scandal at a Treasury Select Committee hearing on Tuesday, where he is expected to be asked how the Bank of England cannot, as has been claimed, have known about Libor abuses until recently. Last week, the governor's deputy, Paul Tucker, told the committee that he was "not aware of allegations of low-balling until the last few weeks".

This week the committee will also grill the former Barclays chief operating officer, Jerry del Missier, and the Financial Services Authority chairman, Lord Turner.

In addition to Mr Diamond, Barclays' chairman, Marcus Agius, will soon leave the bank. Last week, it emerged that Sir Michael Rake, his deputy and currently chairman at BT, is in line to replace Mr Agius.

Suggested Topics
Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on Scotland's oil keeping the First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
News
news

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
footballThe latest scores and Twitter updates from tonight’s games, featuring Bayern Munich vs Man City and Chelsea vs Schalke
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
News
i100
News
news

Watch this commuter wage a one-man war against the Circle Line
News
i100
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

Arts and Entertainment
Maxine Peake plays Hamlet at Manchester's Royal Exchange
theatreReview: Maxine Peake brings emotional ferocity to Shakespeare's starring part
Arts and Entertainment
Jack Huston is the new Ben-Hur
film

It scooped up an unprecedented 11 Academy Awards when it was first remade in 1959

Extras
10 best table lamps
indybest
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs General

IT Project Manager (technical, applications, infrastructure)

£55000 - £60000 Per Annum + benefits: Clearwater People Solutions Ltd: IT Proj...

English Teacher (Bristol and South Gloucestershire)

Negotiable: Randstad Education Bristol: English teachers for day to day cover,...

Teacher

Negotiable: Randstad Education Sheffield: Year 6 Teacher RequiredThis teaching...

SharePoint Administrator - Bishop's Stortford / Stansted

£30000 - £35000 per annum: Ashdown Group: SharePoint Administrator - Bishop's ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week