THE British government will hold a review into the future of a key interest rate used as a reference in trillions of dollars worth of contracts around the world.
Its move to investigate rigging of the London interbank offered rate, or Libor, comes after British bank Barclays was fined £290 million ($446 million) for submitting false rates to benefit derivatives trades.
The inquiry, which begins this week, will focus on possible criminal sanctions against people who breach future regulations on the rate, a British Treasury spokesman said.
Separately, the chief executive of Barclays, Bob Diamond, and the chairman, Marcus Agius, have been called to appear before lawmakers on the Treasury select committee.
The European Union is also investigating the manipulation of Libor and its European equivalent, Euribor. The EU Competition Commissioner, Joaquin Almunia, said antitrust probes into the manipulation of Libor and Euribor rates would focus on possible collusion between financial institutions.
Barclays was fined the record sum after investigators found traders and senior managers ”systematically” tried to rig the Libor and Euribor.
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