Govt: ‘difficult’ to assess consumer impact of LIBOR rigging
Following the record fines issued to Barclays for manipulating the inter-bank lending rate, which is used to set some credit card and mortgage rates, and influences the rates paid out on some types of investment, concerns were raised that consumers may have lost out as a result.
In a written question to the chancellor, David Morris MP asked whether the Treasury could estimate the number of individuals potentially affected by the scandal and the prospects for providing them with compensation.
Answering on behalf of the chancellor, financial secretary Mark Hoban explained why there was no decision yet on whether there was any consumer detriment.
He said: “There is evidence that on different occasions, there were attempts to manipulate the rates in different directions, sometimes to raise them and sometimes to lower them.
“As such it is very difficult to establish the net effect of these opposing actions.
“This is the first of a number of investigations into this issue. The government will keep this under review.”
A number of other banks are still being investigated for their roles in fixing the LIBOR, and it has been reported that Royal Bank of Scotland (RBS) may have to pay more than the record £290m fine levied on Barclays by US and UK financial regulators.