According to Reuters a scandal over the rigging of key
interest rates could plunge the global banking industry into a legal morass for
years, analysts said, as the head of Barclays (BARC.L) fought to hold onto his
job.
With the Times newspaper naming RBS (RBS.L) as the next bank
facing a fine for its alleged involvement in manipulating the key lending rate
between banks, the head of the Bank of England said there needed to be
"real change" in the industry's culture. Referring to what he called
the "deceitful manipulation" of rates, Mervyn King told a news
conference on Friday the London Interbank Offer Rate (LIBOR) should be reformed
to reflect actual market transactions.
U.S. and British authorities fined Barclays $453 million
(288 million pounds) on Wednesday for manipulating LIBOR, which underpins some
$360 trillion of loans and financial contracts around the world - and analysts
forecast more banks would soon be named for collusion.
"Reading the statements by the authorities we expect to
get settlements by others in the course of time which could be more
punitive," analysts at Credit Suisse said.
Others predicted Barclays and other banks could face billions in costs
from litigation, especially in the United States, in much the same way that oil
major BP (BP.L) ran into drawn-out legal rows over its oil spill.
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