US authorities to quiz British banks on Libor scandal

The rate-rigging scandal that has rocked the banking industry showed no signs of abating as US authorities summoned three British banks for questioning.

Royal Bank of Scotland, HSBC and Barclays were among seven banks handed legal notices demanding they assist in an inquiry by the attorneys general of New York and Connecticut.

The move raises fears over future penalties and further damage to the already battered reputation of Britain’s banks, with several other legal cases in multiple countries looking at the manipulation of Libor.

Ian Gordon, analyst at brokers Investec, said there was “plenty more reputational damage and regulatory fines coming down the pipe” but added the issue was now largely “in the past” for Barclays.

Shares in the banks were broadly unaffected by the development, which comes after Barclays was fined £290 million (€360m) by UK and US regulators for manipulating the Libor, a key interbank lending rate.

Barclays declined to comment, while HSBC and RBS both referred to statements made with their half-year results acknowledging ongoing investigations.

Libor — the London interbank offered rate — is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.

Barclays admitted it submitted figures that were lower than accurate for its interbank borrowing, making it appear healthier.


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