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Ministers to order Libor bank rate review Ministers to order Libor bank rate review
(40 minutes later)
  
Ministers are to order an independent review into the workings of the inter-bank lending rate in the wake of the Barclays fine, the BBC has learned. An independent review into the workings of the inter-bank lending rate in the wake of the Barclays fine, the government has announced.
It will examine the future operation of Libor, the rate set every day by the British Bankers' Association (BBA).It will examine the future operation of Libor, the rate set every day by the British Bankers' Association (BBA).
Labour leader Ed Miliband has called for a public inquiry into the customs and practices of the banking industry.Labour leader Ed Miliband has called for a public inquiry into the customs and practices of the banking industry.
Barclays was fined £290m ($450m) for attempting to manipulate the Libor. Other banks are being investigated.Barclays was fined £290m ($450m) for attempting to manipulate the Libor. Other banks are being investigated.
Chancellor George Osborne has confirmed that HSBC, RBS, Citigroup and UBS are also under investigation.Chancellor George Osborne has confirmed that HSBC, RBS, Citigroup and UBS are also under investigation.
A Conservative Party source said the independent review into the Libor would be established next week and report by the end of summer.A Conservative Party source said the independent review into the Libor would be established next week and report by the end of summer.
It will enable amendments to the Financial Services Bill and examine whether to target institutions or individuals and whether to launch criminal prosecutions rather than impose fines.It will enable amendments to the Financial Services Bill and examine whether to target institutions or individuals and whether to launch criminal prosecutions rather than impose fines.
Justice Secretary Kenneth Clarke admitted Britain had a poor record when it came to charging people for financial crimes. Treasury minister Mark Hoban said: "What the public wants to see is a government that's prepared to take action to resolve these problems and get on with it as a matter of urgency."
"When we're setting up the National Crime Agency we should look at the record of the Serious Fraud Office," he told BBC Radio 4's Today programme.
"I suspect financial crime is easier to get away with in this country than practically any other crime."
Ministers are also considering a review into bankers' professional standards, the source told the BBC.Ministers are also considering a review into bankers' professional standards, the source told the BBC.
'Dark corners''Dark corners'
Meanwhile, Mr Miliband has called for an inquiry after questioning whether Britain had "a corrupt elite that abuses its power". Barclays boss Bob Diamond has been summoned to appear before the Treasury Select committee on Wednesday, while chairman Marcus Agius will appear on Thursday.
Andrew Tyrie MP, chair of the committee, said the Mr Diamond's hearing would focus on the Libor scandal, which he said was "the most damaging I can recall".
Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms:
AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full		 Crisis jargon buster Use the dropdown for easy-to-understand explanations of key financial terms:
AAA-rating The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Glossary in full
Meanwhile, Mr Miliband has called for an inquiry after questioning whether Britain had "a corrupt elite that abuses its power".
He told the Times there should be a banking code of conduct, with bankers "struck off if they do the wrong thing".He told the Times there should be a banking code of conduct, with bankers "struck off if they do the wrong thing".
"There has been no systematic look at the customs and practices of the banking industry. We've got to have an open, independent inquiry with hearings to find out what's going on in the dark corners of the banks," he said."There has been no systematic look at the customs and practices of the banking industry. We've got to have an open, independent inquiry with hearings to find out what's going on in the dark corners of the banks," he said.
"Some of it was clearly illegal, but it goes well beyond that. There is a problem with how these people operate.""Some of it was clearly illegal, but it goes well beyond that. There is a problem with how these people operate."
He said what had happened at Barclays was "the worst example yet of abusive, predatory, short-termist take-what-you-can behaviour".He said what had happened at Barclays was "the worst example yet of abusive, predatory, short-termist take-what-you-can behaviour".
Mr Miliband said it was clear that change was required at Barclays and that it was "very hard to see that led by [current chief executive] Bob Diamond".Mr Miliband said it was clear that change was required at Barclays and that it was "very hard to see that led by [current chief executive] Bob Diamond".
Ministers have said new regulation is already in the pipeline with measures including the separation of bank investment and retail arms and a new regulatory structure.Ministers have said new regulation is already in the pipeline with measures including the separation of bank investment and retail arms and a new regulatory structure.
'Embedded in culture'
The Labour leader, who is expected to address the issue in a speech to the Fabian Society Annual Conference later, said he hoped an inquiry would be set up with cross-party support and that he hoped for a new code of conduct which was about "probity, honesty, integrity".The Labour leader, who is expected to address the issue in a speech to the Fabian Society Annual Conference later, said he hoped an inquiry would be set up with cross-party support and that he hoped for a new code of conduct which was about "probity, honesty, integrity".
A widening gap between rich and poor meant there was "a sense of a certain section of the elite who have become so disconnected from other people that they are leading parallel lives", he added.A widening gap between rich and poor meant there was "a sense of a certain section of the elite who have become so disconnected from other people that they are leading parallel lives", he added.
Earlier this week, the Financial Services Authority and US Department of Justice fined Barclays £290m for trying to manipulate the Libor rate. There were also revelations that banks mis-sold specialist insurance.Earlier this week, the Financial Services Authority and US Department of Justice fined Barclays £290m for trying to manipulate the Libor rate. There were also revelations that banks mis-sold specialist insurance.
'Embedded in culture'
The TUC and some Tory backbenchers have also called for a probe similar to the Leveson Inquiry, which is looking into the practices and ethics of the press, but the Treasury and the Bank of England have rejected the idea.The TUC and some Tory backbenchers have also called for a probe similar to the Leveson Inquiry, which is looking into the practices and ethics of the press, but the Treasury and the Bank of England have rejected the idea.
The TUC's head of economic and social affairs, Nicola Smith, said a "continual stream of mis-selling and mis-investment products" suggested the UK banking culture was about "feathering their own nest".The TUC's head of economic and social affairs, Nicola Smith, said a "continual stream of mis-selling and mis-investment products" suggested the UK banking culture was about "feathering their own nest".
Bank of England Governor Sir Mervyn King said Britain's banks needed a "real change in culture" but ruled out a wider inquiry.Bank of England Governor Sir Mervyn King said Britain's banks needed a "real change in culture" but ruled out a wider inquiry.
PM David Cameron supported his comments, saying "concrete action" on accountability, regulation, transparency and behaviour was what was needed.PM David Cameron supported his comments, saying "concrete action" on accountability, regulation, transparency and behaviour was what was needed.
"You don't change culture by changing laws and changing regulators alone, but I think if we can do this in a very clear and considered way then we have a chance of getting this right," he said."You don't change culture by changing laws and changing regulators alone, but I think if we can do this in a very clear and considered way then we have a chance of getting this right," he said.
Former Conservative Chancellor Lord Lamont was among those to back calls for a Leveson-style inquiry.Former Conservative Chancellor Lord Lamont was among those to back calls for a Leveson-style inquiry.
Lord Lamont said the revelations of rate fixing strengthened the government's case for dividing banks between investment and retail banking.Lord Lamont said the revelations of rate fixing strengthened the government's case for dividing banks between investment and retail banking.
"You can't have banks guaranteed by the government and gambling with money in the banks as well," he said."You can't have banks guaranteed by the government and gambling with money in the banks as well," he said.
"I think the most important thing is to identify precisely who knew what, to find people and punish them.""I think the most important thing is to identify precisely who knew what, to find people and punish them."