Rate-fixing row deepens as Tories blame Labour

The political row in Britain over the fixing of inter-bank lending rates deepened at the weekend via the publication of confidential advice from UBS to the previous Labour government on how to reduce the key Libor rate at the height of the financial crisis in 2008.

The Conservative-led coalition has tried to pin part of the blame for the rate-fixing by bank traders on the previous Labour government, questioning whether it directly or indirectly sanctioned the manipulation.

The chairman and chief executive of Barclays Bank both resigned last week after the bank agreed to pay nearly $450m for its part in rigging the Libor rate between 2005 and 2009, which is used to settle interest rates on trillions of dollars of contracts globally.