UK to launch bank rates rigging probe

Britain's parliament will launch a probe into the interest rate rigging scandal that has claimed the job of Barclays chairman Marcus Agius, Prime Minister David Cameron says.

The announcement came hours after Agius resigned over revelations that Barclays traders had lied about the interest rates other banks were charging it for loans.

Britain's Serious Fraud Office said on Monday it is considering whether it was "both appropriate and possible to bring criminal prosecutions" over the issue, adding that it hoped to conclude within a month.

Cameron said people "want to see bankers who acted improperly punished, and they want to know we will learn the broader lessons of what happened in this particular scandal".

"I want to establish a full parliamentary inquiry involving both houses, chaired by the chairman of the Commons Treasury Select Committee," he told parliament.

"This committee will be able to take evidence under oath.

"It will have full access to papers, officials and ministers, including ministers and special advisers from the last government, and it will be given, by the government, all of the resources it needs to do its job properly."

Cameron said Britain also needed to raise taxes on banks and introduce "the toughest and most transparent rules on pay and bonuses of any major financial centre in the world".

The inquiry would "be able to start immediately", the prime minister said. "It will get to the truth quickly so we can make sure this never happens again."

The manipulation of interest rates concerned the Libor and Euribor rates which play a key role on global markets, affecting what banks, businesses and individuals pay to borrow.

On Sunday it emerged that bailed-out Royal Bank of Scotland (RBS) had sacked four traders over their alleged involvement in the affair, raising suspicions the practice may have been widespread.


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