Thursday, August 16, 2012

LIBOR ,money manipulation, fires up in US courts

Royal Bank of Scotland and HSBC were last night summoned to give evidence on the interest rate-rigging scandal that saw Barclays fined £290million.

The two British banks, along with Barclays, were handed legal notices demanding that they assist in an inquiry by the attorneys general of New York and Connecticut.

The demand comes with British banks’ reputation at rock bottom in the US, after Barclays, HSBC and Standard Chartered all became embroiled in separate high-profile scandals.

Now prosecutors from the two states have dragged HSBC and RBS into their investigation into manipulation of the Libor interest rate, used as a benchmark for some £230billion of financial transactions around the world.

Both banks were known to be in talks with regulators scrutinising their role in the affair.

But this is the first time that either has faced a legal notice demanding they give evidence.
Barclays, which has been at the centre of the scandal, was also served with a subpoena, as were at least four other banks, including Wall Street giant JP Morgan, Germany’s Deutsche Bank and UBS of Switzerland.

RBS has already admitted it sacked staff over the affair, which saw Barclays fined £290million and claimed the scalps of chief executive Bob Diamond and chairman Marcus Agius.

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