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Libor Scandal: Seven banks summoned for questioning

in International Business

Libor Scandal: Seven banks summoned for questioning

Seven banks, including HSBC and Citigroup, have been summoned to be questioned in the US for the alleged manipulation of the Libor inter-bank lending rate.

The other banks summoned by the New York attorney general are Barclays, UBS, JP Morgan, Deutsche Bank, and the Royal Bank of Scotland.

The Libor scandal erupted in June when Barclays was fined £290m by UK and US regulators.

Barclays was the first bank to be fined as part of the global probe into suspected manipulation of the Libor rate.

In July US Federal Reserve Chairman, Ben Bernanke told a panel in Congress that ” Libor is a critical benchmark to many financial contracts,” adding that “The actions of traders and banks that have been disclosed are not only very troubling in themselves, but they have the effect of undermining markets.”

There is currently a government ordered review being conducted by the managing director of Financial Services Authority, Martin Wheatley.

Mr. Wheatley will be examining how the Libor rate is calculated and regulated, and has said that the current Libor system is no longer a “viable option”.



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