BRITAIN'S biggest banks face a parliamentary probe into their professional standards as the rate-rigging storm gathers pace.
Chancellor George Osborne said the review, led by Treasury Select Committee chairman Andrew Tyrie, would look at transparency, conflicts of interest, culture and the professional standards in the industry.
The move came after Barclays chairman Marcus Agius resigned over the affair and announced an internal review into the bank’s “flawed” practices.
Barclays chief executive Bob Diamond has also resigned with immediate effect, the bank said today.
Discussing the parliamentary review, which will report back by the end of the year, the Chancellor said: “I don’t think a long costly public inquiry is the right answer. It would take months to set up and years to report. We know what went wrong. We can’t wait until 2015 or 2016.”
Recommendations by the joint committee, if accepted, will be built into the Banking Reform Bill next year, he said, which will also implement the proposals set out by the Independent Commission on Banking earlier in the year.
An independent review of the regulation of Libor, the rate at the centre of the scandal, will also take place and will be headed by Martin Wheatley, the chief of the Financial Conduct Authority. His review will also look at the adequacy of the UK’s current civil and criminal sanctioning powers with regards to financial conduct and market abuse.
Meanwhile, Hexham MP Guy Opperman led calls for police investigation into the scandal.
He said: “What has been going on there is terrible, and I think a criminal investigation would get to the bottom of this. However, I do not see the need for a long public inquiry. All they do is endlessly go around the problem with no real action.
“That’s why a criminal investigation would serve us best.”
The Hexham MP also said the scandal could only bolster the case for local community banks rather than “these big beasts who seem to ride roughshod over the normal rules of law and ethics”.
His comments come in the wake of his pressing the case for smaller local banks, saying they would provide an economic bedrock for communities by recycling savings and expanding credit locally.
Meanwhile, Wansbeck MP Ian Lavery has suggested it is time to consider nationalising all banks. Writing on Twitter, the Labour MP said: “It’s very controversial, but as the days pass by is it not obvious that the banks and financial institutions should be operated by the state.”