U.K. Chancellor of the Exchequer George Osborne will make a statement today on banking as the opposition Labour Party seeks an inquiry into the industry after Barclays Plc (BARC) was fined for trying to rig interest rates and its chairman resigned.
Osborne will address lawmakers in the House of Commons in London at about 4:30 p.m. A spokesman for the Labour leader Ed Miliband said he would propose an amendment to the Financial Services Bill, being debated by the upper House of Lords, to force Prime Minister David Cameron to set up a judge-led inquiry into banking practices, similar to the probe currently under way into media ethics.
Barclays Chairman Marcus Agius quit today after the bank was fined a record 290 million pounds ($455 million) last week for attempting to manipulate the London and euro interbank offered rates for profit. Miliband called for the lender’s chief executive officer, Robert Diamond, to step down too.
“I don’t think that he can carry Barclays forward,” Miliband told ITV’s “Daybreak” program. “If you go out and nick 50 pounds from Tesco, you are punished; at least we hope that you are punished. If you fiddle, lie, cheat to the tune of millions of pounds, you should also have the full force of the law brought against you.”
The House of Commons Treasury Committee has called on Diamond to testify about Libor on July 4 and on Agius to appear the following day.
“There needs to be much better explanations of the responsibility at Barclays,” Miliband said. “I really don’t believe that the leadership and restoring trust in Britain’s banking can be done by Bob Diamond.”
Both Cameron and Business Secretary Vince Cable, a Liberal Democrat, have said they see limited value in an independent judicial inquiry. The government has ordered an independent look at practices surrounding the setting of Libor.
Cameron’s spokesman, Steve Field, repeated the government’s statement that there is no need for an inquiry today.
“We know what went wrong,” he told reporters in London. Asked if Cameron welcomes the resignation of Agius, Field said it was a “matter for the shareholders” of Barclays. He indicated that Agius would also step down as a U.K. trade envoy, as that position was the result of his role at the bank.
The Treasury Committee will also ask questions this week about Paul Tucker, the deputy governor of the Bank of England, who spoke to Barclays by telephone in October 2008, Field said.
At least a dozen firms, including Citigroup Inc., Royal Bank of Scotland Group Plc (RBS) and UBS AG, are being probed by regulators worldwide for colluding to rig the Libor rate, the benchmark for more than $360 trillion of securities, including mortgages, student loans and swaps.
Conservative lawmaker Mark Field, who represents London’s financial district, said he expects more bankers to step down.
“It is fairly evident” that Barclays was not the only bank involved,” Field told Sky News television. “Four traders were dismissed by RBS earlier in the year and the Bank of England have also been caught up to a certain extent as well. It is a very fluid situation and I expect that there will be several more resignations.”
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