Britain's SFO launches criminal probe into Libor fixing scam at Barclays
07 July 2012
The rate-fixing scam at British financial major Barclays Bank has led to a criminal probe by the country's Serious Fraud Office (SFO).
The investigation is being launched days after the top three bosses at Barclays were forced to quit after regulators in the UK and the US slapped a 290 million pound penalty on the bank for alleged rigging of the Libor (London Inter-Bank Offered Rate) and Euribor (Euro Inter-Bank Offered Rate).
Bob Diamond, chief executive of the bank, quit earlier this week after pressures from the Bank of England, followed by Jerry del Missier, co-head, investment banking, who was recently made chief operating officer. Chairman Marcus Agius is expected to leave soon.
The more than 300-year-old institution moved out of traditional banking in the mid-1980s, when Britain's financial industry was deregulated by then prime minister Margaret Thatcher. It set up its investment arm, BZW, and began expanding aggressively into investment banking.
After BZW was dismantled in the mid-1990s, with parts of it being sold, the entity was renamed as Barclays Capital, which focussed on debt markets. Diamond, del Missier and Rich Ricci, the investment bank chief, aggressively focused on investment banking.
In 2008, they acquired the American assets of the bankrupt Lehman Brothers and emerged as the seventh-biggest player in international debt markets. The investment bank's profit of three billion pounds last year accounted for more than half of the bank's total profits.