By Matt Falloon
LONDON, July 2 Britain's parliament will
investigate an interest-rate fixing scandal that has rocked
London's banking sector, in a wide-ranging inquiry which a
source said would encompass issues such as culture and standards
in the industry.
"I want us to establish a full parliamentary committee of
inquiry involving both houses," Prime Minister David Cameron
told parliament on Monday, stopping short of giving further
details on its full remit.
"This committee will be able to take evidence under oath, it
will have full access to papers and officials and ministers
including ministers and special advisers from the last
The government has come under increasing pressure to take a
closer look at the bank sector, which has felt the force of
public anger since taxpayers bailed out several banks during the
2008-9 financial crisis.
That pressure intensified last week when Barclays
was fined for trying to manipulate the London Interbank Offered
Rate (Libor), used worldwide as a benchmark for prices on about
$350 trillion of derivatives and other financial products.
The opposition Labour Party had threatened to trigger a vote
in parliament on whether there should be a judge-led independent
inquiry into the banking sector's excesses, culture and
The UK source said the investigation, to be outlined by
finance minister George Osborne at around 1530 GMT, would be
"wider than a narrow review into Libor and criminal sanctions
... (and) will encompass culture and sanctions."
The government is likely to come under fire for not
establishing an independent inquiry - similar to the current
Leveson inquiry which is investigating standards in the media.
However, some ministers may be wary of any investigation
which could make their own planned overhaul of the industry's
current regulatory regime look inadequate.
While it is politically expedient to "bash the bankers," the
Conservative-led government will also be wary of attacking a
crucial sector in Britain's economy which is still struggling to
function properly after the credit crunch.
Labour leader Ed Miliband has called on Barclays Chief
Executive Bob Diamond to resign after the bank's involvement in
the interest rate-fixing scandal.
That case is likely to be just the tip of the iceberg, with
several other banks under scrutiny for trying to manipulate
Barclays Chairman Marcus Agius fell on his sword in an
effort to stem the scandal, but critics say that is not enough
and that the whole industry needs to change.
"I want to see a new code of conduct for bankers ... For all
we know, some of the people who were part of this scandal might
still be working in other banks," Miliband told ITV on Monday.
"There also needs to be that full inquiry, that full public
inquiry into exactly what has happened throughout our banking