Chichester MP Andrew Tyrie has labelled the latest banking scandal which has led to the resignation of Barclays CEO Bob Diamond, as ‘the most damaging scam I can recall’.
The former economist and head of the treasury select committee has been approached by government to lead the inquiry into how vital inter-bank Libor interest rates were manipulated by city traders.
As part of the investigation, which Labour MPs believe should be made a full inquiry independent of parliament, the actions of a number of leading high-street banks will come under scrutiny, with attention focusing in particular on Barclays, which has been fined £290m for its part in the scandal.
Its penalty is the biggest ever issued to a London bank.
As chairman of the treasury select committee, Mr Tyrie, who is a respected former economist, has previously spoken of the banks’ need to assist firms across the UK and smaller businesses within the Observer area in particular.
Expressing his considerable concern on the House of Commons website, he said: “The Libor interest rate benchmark, crucial to transactions right across the economy and affecting millions of people – was systematically rigged over a period of years.
“It appears that many banks were involved and Barclays were the first to own up.
“This is the most damaging scam I can recall.
“The reputation of Britain’s financial services industry has been severely tarnished, albeit unfairly for the overwhelming majority unconnected with the scam. The public’s trust in banks has been even further eroded.
Restoring the reputational damage must begin immediately.
“Parliament and the public need to know what went wrong and whether the perpetrators have been rooted out. We also need to be given confidence that this has been put right.”
However, he potentially ruled himself out of acting as lead investigator unless full parliamentary support was given to the move.
The issue has evoked a huge shockwave within the city’s major banks over the fresh major scandal.
It is believed Barclays could have been involved in manipulating rates from as far back as 2005.
Last Friday, Mr Tyrie received a letter from Bob Diamond, of Barclays, admitting the company had acted below the standards which he expected.
In the wake of this, chairman of the company, Marcus Agius, offered to quit, but in a dramatic twist, Mr Diamond, who reportedly came under pressure from the Bank of England, instead offered his resignation.
Mr Diamond, who worked at Barclays for 16 years, gave evidence yesterday (Wednesday, July 4) to the treasury select committee.