Osborne accused of linking innocent banks to scandal

 

George Osborne last night stood accused of being reckless when he wrongly named two major banks as being under investigation for the Libor rate-fixing scandal.

As Barclays' share price plunged more than 20 per cent after revelations of its involvement in the scandal, the Chancellor stood up in parliament and, in what appeared to be a scripted answer to a question from a Conservative MP, named four other banks being investigated in the UK.

The statement was made on Thursday, 24 hours after the Barclays fines were announced, giving the Chancellor plenty of time to get his facts right.

The Independent reported yesterday how HSBC was furious to have been named when it, in fact, was not being investigated by the UK authorities. Now it has emerged that one of the other banks Mr Osborne cited, Citigroup, is also not under investigation here.

The banks are particularly angry because the Treasury refuses to issue any sort of retraction. Instead, concerned investors and media have been told to contact the Financial Services Authority for "guidance" about the true state of affairs – that the pair are not subject to any investigation.

One banker told The Independent: "It is completely reckless in these febrile times that the Chancellor should completely wrongly name banks as being investigated for what could be criminal activity. Look at what happened to Barclays shares. The Chancellor should be completely upfront and admit he has made a mistake and clarify it."

The Treasury has refused requests from the banks to clarify the error, claiming the Chancellor did not specifically state that the banks were being investigated by the FSA.

But a Hansard transcript shows his statement was unambiguous: "HSBC and RBS are two of the banks under investigation, but international banks such as UBS and Citigroup are under investigation too, partly for activities conducted in this country," he said.

HSBC says it is not being investigated anywhere in the world, although it has, along with all other banks providing quotes for the Libor setters, been asked to supply certain documents. Citigroup declined to comment on investigations in other jurisdictions but is definitely not being probed in the UK.

The Treasury's refusal to clarify the situation puts the FSA in a difficult position: under its rules it is not allowed to publicly state whether firms are being investigated or not.

The fiasco has one silver lining: HSBC and the US-based Citi, can now boast of being the only two Libor panel members to have been cleared of wrongdoing by the regulator.

HSBC shares fell 15p to 558p on the day of the Chancellor's statement. It has since recovered to open this morning at 570.3p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
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 General

Recruitment Genius: Sales Executive or Senior Sales Executive - B2B Exhibitions

£18000 - £30000 per annum: Recruitment Genius: A Sales Executive or Senior Sal...

Recruitment Genius: Head of Support Services

£40000 - £55000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Warehouse Team Leader

£22000 per annum: Recruitment Genius: This industry leading company produces h...

Recruitment Genius: Business Development Manager / Sales - OTE £40,000

£20000 - £40000 per annum: Recruitment Genius: This IT provider for the educat...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
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