Chancellor clashes with opposition over Barclays
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Chancellor George Osborne has described the Barclays-Libor scandal as “an epitaph to an age of irresponsibility” in a statement to the House of Commons.
In response to an investigation of Barclays by the FSA that found Barclays had attempted to manipulate the London Interbank Offered Rate (Libor), Osborne accused the Labour Party opposition of failing to grant the regulator necessary powers at the time when market manipulations were said to occur.
Noting the absence of shadow Chancellor Ed Balls, Osborne broke off from his speech to demand an apology from the former governing party for “the mess this government is trying to clean up”.
Osborne confirmed investigations were underway against individuals adding that those responsible should be held to account. He specifically mentioned Barclays chief executive Bob Diamond as having “some very serious questions to answer” as to who was involved.
However, Osborne told members of parliament that the FSA’s power “does not extend to criminal sanctions for manipulation of Libor”, a failing by the previous administration, he said.
“We are looking at criminal sanctions for market manipulation,” said Osborne.
Whether criminal sanctions should extend to directors of failed banks would be determined by the outcome of the investigation, he added.
He also suggested fines paid to the FSA should go towards helping the taxpaying public.
Responding for the opposition, Rachel Reeves, shadow chief secretary to the Treasury, noted that Libor remains excluded from the Financial Services Bill which is currently before parliament.
The FSA handed out its largest ever fine - £59.5m - to Barclays after it found the bank had tried to manipulate Libor, the rate at which banks lend to each other, which has led to much criticism and calls for further action.
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Readers' comments (4)
Michael | 28 Jun 2012 1:25 pm
He also suggested fines paid to the FSA should go towards helping the taxpaying public.
NO, NO, NO!! They go towards reducing our FSA costs. If the Tax payer wants the monies then they can pay for the FSA, FSCS, MAS etc.
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shane | 28 Jun 2012 1:34 pm
uh no george the money should be used to reduce IFA fees - not for you to p++s up against a wall somewhere !!!!
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johnmorgan | 28 Jun 2012 1:35 pm
It is amazing to think that the current rules, drawn up by the previous Labour Administration, don't cover for fraud and manipulation being classified as a criminal offence! You can draw your own conclusions in relation the number of legal minds in the last administration that would benefit financially by having to clean up the mess.
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Anonymous | 28 Jun 2012 5:29 pm
This is not about Labour or Conservative blame games It is about the morality/practices of an industry that has single handedly brought this country to its knees along with the continent of Europe, caused economic misery to millions of ordinary people and quite possibly destroyed the prospects of a generation. The FSA can only be regarded as co-defendants in this case as it happened on their watch. Time and time again the FSA has failed to protect those who have relied on it to regulate the UK financial services industry. Frankly, I'm surprised there have not been mass protests in the streets.
The UK needs a 'people's bank' now to provide competition to the usual suspects who have consistently failed to clean up their act. UK banks should be exluded from the sale of financial products to retail investors.
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