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Barclays 'have big questions to answer' - Cameron

posted 28 Jun 2012, 08:18 by Sam Mbale   [ updated 28 Jun 2012, 08:18 ]

British Prime Minister David Cameron says the management of Barclays will have to answer some "serious questions" over an investigation which found it had manipulated interbank lending rates over several years.

LONDON, ENGLAND, UNITED KINGDOM (JUNE 28, 2012) (UK POOL) - Britain said on Thursday (June 28) it had brought in the fraud squad to investigate possible crimes and would tighten laws over attempts to manipulate lending rates, a scandal which has engulfed Barclays and is expected to spread to other banks.

Shares in Barclays tumbled as much as 18 percent at one point by midday trade, wiping out 4.2 billion pounds from its share price - the biggest one-day fall since 2009, according to Reuters data.

Shares were down 14.8 percent at 1513 GMT.

The bank agreed to pay a record $453 million fine to U.S. and British regulators for attempting to manipulate the London Interbank Offered Rate in 2005-08.

It is the first bank to settle in a case that also includes most of the world's other largest financial institutions.

"Look this is a scandal, it's extremely serious, they've paid a very large fine and quite rightly but frankly the Barclays management team have some big questions to answer - how did this happen, who was responsible, who's going to be held accountable for it?" said Prime Minister David Cameron.

He and finance minister George Osborne both said regulations would be reviewed and tightened if necessary.

Barclays Chief Executive Bob Diamond has acknowledged that the settlement would damage customer trust in the bank, and said he and other senior executives would forgo bonuses this year.