Cable backs rate-fixing crime probe
Business Secretary Vince Cable has backed calls for a criminal investigation into bankers involved in the Libor rate-fixing scandal.
The Liberal Democrat Cabinet minister said the public could not understand why the perpetrators of "what looks like a conspiracy" were allowed to "just walk away".
The potential for prosecutions arising from the scandal has been downplayed by Treasury sources who point out that there are no criminal sanctions in place for manipulating the inter-bank lending rate, known as Libor.
Libor is set on a daily basis by panels of banks and used to help set "swap rates" - the borrowing rate between financial institutions. These rates in turn are used to price a vast range of products such as corporate loans and fixed-deal mortgages.
Lord Blair, a former head of Scotland Yard, added his weight to the call for a criminal investigation. He said there had to be police inquiries into revelations that traders at Barclays, Royal Bank of Scotland (RBS) and other banks had tried to fix the rate.
"Anybody, the youngest detective, would say this is conspiracy to defraud. It can mean nothing else. And therefore someone has to launch a criminal inquiry into this behaviour," he said.
Mr Cable said the Serious Fraud Office was having "a fresh look" at the Financial Services Authority's investigation into the affair and that the public expected criminal prosecutions. "They just can't understand why people are thrown into jail for petty theft and these guys just walk away having perpetrated what looks like conspiracy," he said.
His intervention came as it emerged that taxpayer-backed RBS has sacked four staff over their alleged role in the Libor-fixing scandal. The bank declined to comment on the matter but sources said the sackings were made at the end of last year.
As well as supporting the idea of a criminal inquiry, Mr Cable urged shareholders to stand up to executives and boards who had allowed "systemic abuse" to set in.
His comments intensified the pressure on Barclays chief executive Bob Diamond, who is to be hauled before MPs on the Treasury Select Committee on Wednesday to answer questions about the scandal which landed his bank with a £290 million fine last week.