The Director of the Serious Fraud Office (SFO) has announced that the existing criminal law is sufficient to allow prosecutions over the alleged fixing of the Libor inter-bank lending rate.
David Green QC has said that he is satisfied that charges can be brought against individuals who acted to manipulate the Libor rate, although he stopped short of specifying which charges could be brought.
The scandal broke several weeks ago when US and UK Regulators announced a record £290m ($454m) fine for Barclays, after its investigation concluded that traders within the bank had acted to manipulate the inter-bank lending rate.
The announcement sparked speculation that several other banks were involved and would also face significant fines, and it would cost the Barclays chief executive Bob Diamond his job at the helm of one of the world's biggest financial institutions.
However, there has been speculation ever since as to whether the existing law would be sufficient to bring criminal prosecutions against individuals who carried out the acts to fix the rate. The SFO announced in early July that it would investigate whether criminal prosecutions, with the possibility of jail sentences, could be brought.
It is thought that all the major UK lenders could face charges, with RBS and Lloyds also being investigated.
In addition to criminal charges and investigations by financial regulators, all the banks will face civil prosecutions from major borrowers who will have paid more than they should have to borrow money. New York lender Berkshire Bank has filed papers against several major banks in the US and other similar cases are expected.
Yesterday Martin Wheatley, who is head of Financial Conduct at the Financial Services Authority, announced that the law relating to Libor would need to be changed urgently.
"It is clear that urgent reform of the Libor compilation process is required," he told the Telegraph.
Bankers found to have rigged Libor rate could face jail (The Telegraph)