THE prospect of criminal prosecutions in the Libor rate-fixing scandal was raised last night after the Serious Fraud Office announced it was launching an investigation.
At the end of an explosive week of high-profile resignations and fierce political debate, David Green, QC, the SFO's director, formally set his department's sights on the banking controversy.
The move came as reports emerged that Germany's markets regulator had launched a probe into Deutsche Bank over suspected manipulation of interbank lending rates, joining authorities around the globe investigating the world's largest banks.
Barclays has been fined £290 million by US and UK regulators for manipulating the Libor, the key lending rate which affects mortgages and loans.
The claims ultimately led to the resignation this week of Barclays boss Bob Diamond and have become the focal point of a bitter row at Westminster, which has resulted in a parliamentary inquiry involving a committee of both Houses of Parliament.
Last night, Danny Alexander, Chief Secretary to the Treasury, welcomed the SFO's decision.
He said: "The Financial Services Authority (FSA) has carried out a detailed investigation and the Serious Fraud Office has the opportunity to take forward the investigation." He added: "Of course, as a Government we will make sure they have all the resources they need to carry this investigation out to the full."
Yesterday, Barclays shares continued to suffer, falling 2% on the FTSE-100 index.
Earlier this week, the SFO revealed it had been working closely with the FSA during its investigation and was weighing up whether it could proceed with criminal prosecutions.
At Westminster, Labour leader Ed Miliband continued to push for an independent judge-led inquiry despite MPs having rejected the demands in a vote on Thursday.
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