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UK rate-rigging probe launched

July 6, 2012

Britain's Serious Fraud Office (SFO) has confirmed it is to launch a criminal investigation into the rigging of the interbank lending rate Libor. It comes after senior executives at Barclays resigned over the scandal.

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City of London with Bank station underground sign and red double-decker bus
Image: picture-alliance/Jane Legate/Robert Harding

The UK fraud office (SFO) issued a statement on Friday, saying that "the SFO director David Green QC has today decided formally to accept the Libor matter for investigation."

The statement by the independent government agency did not say who exactly was under investigation.

It follows the resignation of senior executives, among them Chief Executive Bob Diamond, at the UK's Barclays Bank.

Last week, Barclays was fined $453 million (368 million euros) by US and British regulators for its alleged involvement in rigging the so-called London Interbank Offered Rate (Libor). Broadly speaking, it is the rate at which banks lend to each other. It is set daily by the British Bankers' Association.

Barclays is the first bank to have settled in an investigation that is looking at more than a dozen other banks and submissions they made for calculating Libor rates. Barclays has agreed to help improve the reliability of the rate-setting system.

Libor rates are used in an estimated $360 trillion worth of financial contracts, ranging from credit cards to complicated derivatives transactions

ng/slk (Reuters, AP)