Prosecutors tell Barclays to hand over scandal papers

New York prosecutors have reportedly ordered Barclays to hand over records relating to the growing Liberty Reserve scandal.

The accounts in the name of Arthur Budovsky, who is allegedly at the centre of the multi-billion-pound scandal, are held in one of Barclays' Spanish subsidiaries. The account is believed to have been opened in 2009, but it is not yet clear what it was used for. It is thought to be one of 45 held by Mr Budovsky and other individuals involved in Liberty Reserve, the Costa Rica-based payments processor.

US authorities have seized $25m £16m) from these accounts to date, and have said that there is "more to come". Any linkage between Barclays, even completely unwitting, will be an acute embarrassment to new chief executive Antony Jenkins, who is trying to clean up the banks image following last year's Libor fixing scandal.

Mr Budovsky was arrested 10 days ago in Madrid over the actions of Liberty Reserve, the global "black market bank", and its potential links to money laundering.