Libor
Treasury

Roberta Blackman-Woods (City of Durham, Labour)

To ask the Chancellor of the Exchequer

(1) what information he has received from the Financial Services Authority on whether (a) sterling LIBOR and (b) other currency LIBOR rates have been affected by the actions of Barclays;

(2) if he will take steps to ensure that suitable measures for redress will be made available to UK businesses mis-sold financial products based on LIBOR if banks are found to be guilty of rate manipulation.

Stewart Hosie (Dundee East, Scottish National Party)

To ask the Chancellor of the Exchequer what assessment his Department has made of the potential effects of the fixing of the LIBOR on the ability of UK banks to (a) remain solvent and (b) operate without payments from the public purse during 2008.

Greg Clark (Tunbridge Wells, Conservative)

On 27 June the FSA fined Barclays Bank Plc (Barclays) £59.5 million for misconduct relating to the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR) between 2005 and 2008. This is the largest fine ever imposed by the FSA. Barclays was separately fined £230 million by the US regulatory authorities.

Such misconduct includes attempted manipulation. In some cases those attempts were to lower the final LIBOR rate, and in others they were to increase it. Such attempts may only have moved the overall LIBOR rate by a fraction of a percentage point, if at all. Consequently it is very difficult to establish any sort of net effect from the attempted manipulation.

The Government believe that this and other recent examples of misconduct in the banking sector are completely unacceptable. This is why the Government are taking action now, including comprehensive reform of the regulatory system.