Libor probe decision 'within month'

Updated: 
Marcus AgiusThe storm around the rate-rigging scandal has gathered pace as fraud investigators said they would decide within a month on whether a criminal prosecution was appropriate.

The update from the Serious Fraud Office (SFO) came hours after Barclays chairman Marcus Agius resigned and announced an internal review into the bank's "flawed" practices.


A statement from the SFO said "the issues are complex" and added it is "considering whether it is both appropriate and possible to bring criminal prosecutions".

Both announcements came after Barclays was last week fined £290 million by UK and US regulators for manipulating the Libor, the rate at which banks lend to each other.

There have been mounting calls for criminal prosecutions to be brought against those responsible for fixing the Libor for their own personal benefit.

The Chancellor is expected to reveal further details on an inquiry into Libor-setting and strengthening criminal sanction powers. The review is reportedly to be headed by an independent figure to ensure a speedy response to the issue, resulting in amendments to the Financial Services Bill this summer.

Despite mounting calls for his departure, Barclays chief executive Bob Diamond showed no signs of stepping down, as he pledged to fully implement the findings of an independently-led audit into practices at the banks since the financial crisis.

The Bank of England was also drawn into the affair after it emerged staff mistakenly thought they were instructed by the central bank to lie in their rate submissions.

The Financial Services Authority's report said there had been a misunderstanding arising from a conversation between Bank Deputy Governor Paul Tucker, a favourite for the Governor role, and an unidentified senior Barclays manager on October 29 2008.

Mr Agius, 65, who was chairman for six years, said he was "truly sorry" for the affair, which has "dealt a devastating blow to Barclays' reputation". He will remain in post until an "orderly succession is assured", while Barclays non-executive director Sir Michael Rake has been appointed deputy chairman.

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