UK bank scandal: Labour for Leveson-style probe

British Prime Minister David Cameron termed the interest rate-fixing scandal as "appalling" and "outrageous".

London: British Prime Minister David Cameron on Wednesday termed the interest rate-fixing scandal, which prompted the top brass of the Barclays bank to quit, as "appalling" and "outrageous", even as the opposition Labour party demanded a Leveson-style public inquiry into the banking industry.

Barclays chief executive Bob Diamond, who resigned yesterday, was scheduled to present a much anticipated evidence before the Treasury Select Committee later today, as public anger mounted over the scandal in the bank that was bailed out by the taxpayer in 2008.

In the House of Commons, amidst wrangling during the Prime Minister`s Questions, David Cameron said the scandal was "appalling" and "outrageous", while Labour leader insisted on the kind of televised public inquiry (Leveson Inquiry) that is probing the ethics, culture and practices of the press.

A key point in the ongoing banking scandal story is that it may widen to other banks operating in London. Barclays were fined for rigging the two key interest-rate fixing benchmarks: Libor and Eurobir.

Cameron wants a probe into the scandal by MPs, while the Labour party wants it to be a judge-led public inquiry. MPs are scheduled to vote tomorrow on the kind of inquiry to be set up.

Cameron told the House of Commons: "It is outrageous, frankly, that homeowners may have paid higher mortgage rates and small businesses may have paid higher interest rates, because of spivvy and probably illegal activity."

"People want to know that crime in our banks, crime in our financial services will be pursued and punished like crimes on our streets", he added.

Miliband said the inquiry proposed by Cameron was too narrow. Pushing for a wider inquiry, Miliband suggested a two-party inquiry, with one part reporting by Christmas, covering Libor, and another part, covering the industry generally, lasting another year.


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