Jeremy Hobson: It appears more of the world’s largest banks are getting roped into allegations of fraud. According to the Financial Times newspaper, four big European banks have joined Barclays in the not-so-prestigious club of financial institutions being investigated for rigging a benchmark lending rate called LIBOR.
Marketplace’s Stephen Beard has the latest from London.
Stephen Beard: Regulators are now reported to be investigating HSBC, Deutsche Bank Societe Generale, and Credit Agricole. The Financial Times claims that all four banks are suspected of being in league with Barclays. They are thought to have conspired to manipulate the so-called LIBOR — a London benchmark for trillions of dollars of financial transactions. Meanwhile, moves are afoot to reform the LIBOR system.
Fund manager Justin Urquart Stewart says that could mean taking it away from London.
Justin Urquart Stewart: This rather archaic mechanism — operated in London — has always been under question because it was open to abuse. And lo and behold, it looks as though it has been abused. And therefore people will look and say: Shall we leave it in London or not?
U.S. Treasury Secretary Tim Geithner has made his feelings plain. He said LIBOR reform should not be left to the British, because they had failed to address earlier concerns about the system.
In London I’m Stephen Beard for Marketplace.
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