Barclays was fined for trying to manipulate the Libor rates |
Seven
banks, including HSBC and Royal Bank of Scotland, are to be questioned in the
US for alleged manipulation of the Libor inter-bank lending rate.
The other
banks receiving subpoenas by the New York attorney general are Barclays,
Citigroup, Deutsche Bank, JPMorgan and UBS.
Last month,
Barclays was fined £290m by UK and US regulators for rigging Libor.
Some of the
world's biggest banks have been embroiled in a number of scandals in recent
months.
Following
the Barclays fine, US regulators said they were investigating a number of other
banks for potential Libor rigging.
A
government-ordered review into Libor is currently being conducted by the managing
director of the Financial Services Authority, Martin Wheatley.
The
Wheatley review is examining how the Libor rate, the benchmark interest rate
for trillions of financial contracts including some mortgages, is calculated
and regulated.
The current
Libor system is no longer a "viable option", Mr Wheatley said.
Libor is
calculated using rates submitted by a group of leading banks who estimate how
much it costs them to borrow in 10 currencies and 15 lengths of loans, ranging
from overnight to 12 months.
There have
been a series of allegations over the trading policies of banks in recent
months.
Bank woes
On Tuesday,
Standard Chartered agreed to pay $340m (£217m) to New York regulators to settle
claims that it hid transactions worth $250bn with Iran.
Standard
Chartered shares rallied on Wednesday after it agreed to settle the claims,
after the institution had been threatened with having its US banking licence
revoked.
Last week,
New York's DFS alleged that the US unit of the bank had illegally hidden 60,000
transactions with Iran worth $250bn over nearly a decade.
It accused
the London-based bank of being a "rogue institution" for breaking US
sanctions against Iran.
The bank's
chief executive Peter Sands.
HSBC has
also been accused of failing to prevent money laundering by the US Senate.
According
to the Senate report, the US unit of HSBC carried out 28,000 undisclosed
sensitive transactions between 2001 and 2007, an internal audit commissioned by
the bank found. The vast majority of those transactions - worth $19.7bn -
involved Iran.
As for
Barclays, the Libor scandal led to the resignation of chief executive Bob
Diamond as well as chairman Marcus Agius.
Last week,
Sir David Walker was appointed as the new chairman.
He said he
wants to review the way the bank operates and will begin his search for a new
chief executive "within days".
Sir David
is a senior banker who led the 2009 government inquiry into the rules governing
how banks are run.
RBS has already
admitted it is being investigated for fixing Libor.
It said:
"RBS Group continues to receive requests from various regulators
investigating the setting of libor and other interest rates.
"We
are cooperating with the investigations and are keeping relevant regulators
informed."
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