UK finance minister urges bank inquiry to report by end of 2012

Britain's Chancellor of the Exchequer George Osborne, flanked by Prime Minister David Cameron (R), announces an inquiry into banking practices, at parliament in London July 2, 2012. Osborne said on Monday the government would consider whether bank executives could be held to account by law for the actions of rogue employees.

LONDON (Reuters) - British finance minister George Osborne said on Monday a parliamentary inquiry into banks should report on its findings by the end of this year to allow the government to change laws and prevent a repeat of the interest rate fixing scandal.

"I propose that it should be able to call witnesses under oath, including current members of parliament and lords," he said in a speech to parliament, adding that urgent changes were needed to regulation of Libor rates and other markets.

Martin Wheatley, the Chief Executive designate of the Financial Conduct Authority would review what reforms are required to the current framework for setting and governing LIBOR and report by the end of summer, Osborne said.

He added that fines to the banking sector would go to taxpayers, not other banks, in an apparent move to placate a broader public angry at the scandal engulfing the industry.

(Reporting by Tim Castle, Matt Falloon; Writing by Maria Golovnina)