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The Financial Services Authority (FSA) has defended itself against criticism of its role in the Libor scandal. MPs on the Treasury Committee published their report "Fixing Libor" in August, which said the FSA had failed to investigate market rumours of rate-rigging properly. Responding to that report, the City watchdog said it had been engaging with US authorities since 2008. It denied it had taken a narrow view of its power regarding fraudulent conduct. The Libor scandal emerged in June last year when UK and US authorities fined Barclays £290m for fixing a key inter-bank interest rate.
Since then, Swiss bank UBS and Royal Bank of Scotland have been given fines of £940m and £390m respectively. In its report, the Treasury Committee blamed Barclays bosses for "disgraceful" behaviour, which damaged the UK's reputation, but was also critical of regulators. It said the Bank of England had been "naive" about the possibility of Libor manipulation during the financial crisis and had been "relatively inactive", but said the failure of the FSA to do its job and properly investigate the market rumours was far worse............Read more here
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Banks should be forced to pay much bigger fines if they “fail” to co-operate with investigations into their misbehaviour, according to the Treasury Select Committee.....Telegraph report: Banks should face 'much bigger fines', say MPs
The documents referred to artificially lowering the key interbank lending rate, a practice that made banks appear more secure during the financial crisis but also suggested that Libor was being manipulated by traders for profit at other times. FSA chairman Adair Turner said the audit provided a warning to staff on the need to monitor the conduct of banks alongside measuring the risk they pose to the financial system....Read more here