China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Banks

UK orders review of interbank rates

Posted on June 30, 2012

The British government has ordered an independent review into the workings of interbank lending rates, a spokeswoman for David Cameron, the prime minister said on Saturday.

The decision, reported by Reuters, follows news earlier this week that US and British authorities fined Barclays $450m for manipulating the London Interbank Offer Rate (Libor), the rate at which banks lend to each other overnight.

    The Treasury Select Committee has called the Barclays chief executive, Bob Diamond, to appear before it on Wednesday. Non-executives, including Chairman Marcus Agius, will be questioned on Thursday.

    Andrew Tyrie, chairman of the committee, said the reputation of Britain’s financial services industry had been severely tarnished by the “scam”.

    “Restoring the reputational damage must begin immediately,” he said, “Parliament and the public need to know what went wrong and whether the perpetrators have been rooted out. We also need to be given confidence that this has been put right.”

    Barclays’ compliance department failed to act on three separate internal warnings between 2007 and 2008 about conflicts of interest and “patently false” submissions by its staff to the panel that sets the benchmark interest rate used to price mortgages and credit card loans worldwide.

    Some £3.6bn has been wiped off Barclays market value since the fine was announced on Wednesday as part of a probe that involves 20 banks across three continents.

    More banks are expected to be drawn into the scandal as the investigation continues and the affair has fuelled public outrage at the culture and practices of the banking industry.

    Taxpayer-backed Royal Bank of Scotland confirmed it was being investigated for manipulating Libor, PA reported.

    Ed Miliband, the Labour leader, has called for a full-scale public inquiry into banking culture and practices after the City was rocked by two major scandals in the space of a week.

    The Labour leader said the industry was plagued by an “institutional corruption’’ that could only be eradicated by introducing a tough new code of conduct and jail sentences for immoral bankers who abuse the system.

    Mr Miliband pushed for a 12-month probe to “find out what is going on in the dark corners of the banks’’ after the FSA uncovered “serious failings’’ in the sale of complex financial products to small businesses, just days after the rate-rigging affair emerged at Barclays.

    In an interview with The Times, Mr Miliband said: “There hasn’t been a proper reckoning for what happened in the banking crisis. The bankers told us – it’s all fine, we’ve cleaned everything up. But I’m afraid that doesn’t hold water any more.’’