Pressure on the banking sector over the Libor-rigging scandal was ramped up after it emerged that seven banks, including the Royal Bank of Scotland and HSBC, have been issued with subpoenas in the US.
The threat of prosecutions loomed closer as authorities in New York and Connecticut became the latest to widen the investigation into the alleged manipulation of the interbank lending rate.
New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating and have requested information from JP Morgan Chase, Barclays, state-backed lenderRoyal Bank of Scotland and HSBC. UBS, Deutsche Bank and Citigroup were also named in the report by Bloomberg.
Ralph Silva, a banking analyst at SRN, said: “This is actually a bit surprising. We expected to hear more banks being served with Libor subpoenas, but we didn’t expect to see them all happen at the same time.
“It’s quite clear that over the past six months [regulators] have put a tremendous amount of resources into this, and it looks like all those investigations are coming to a head right about now.”
Barclays has already been fined £290m for its role in rate rigging. The scandal prompted the resignation of its chief executive Bob Diamond and chairman Marcus Agius. It is expected that investigations into other banks will result in further fines and resignations.
“We’re going to see a lot of change in senior management for some of the the world’s biggest banks. There will be some turmoil in the banking industry over the next few months,” said Mr Silva.
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