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?
ebooksA special investigation by Andy McSmith
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: Payroll Officer - Part Time

£12047 per annum: Recruitment Genius: Part Time Payroll Officer required for t...

Recruitment Genius: Event Management and Marketing Admin Support

£16000 - £18000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Recruitment Genius: Lettings Negotiator

£20000 - £40000 per annum: Recruitment Genius: A Central London based firm loo...

Day In a Page

War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot