Scandal, Libor Scandal | featured news

The investigation into the manipulation of the Libor benchmark interest rate has led banks to seek to implicate their rivals, according to government and bank officials.

Barclays Plc revealed a new regulatory probe and more U.S. lawsuits on Friday, making it harder for the British lender to rebuild its reputation damaged by the central role it played in the interest rate-rigging scandal shaking banks.

Central bankers and regulators will hold talks in September on whether the troubled global Libor interest rate can be reformed or whether it is so damaged that the benchmark of borrowing costs should be scrapped.

Barclays alerted U.S. regulators as far back as 2007 to concerns that banks were rigging benchmark interest rates, according to documents released on Friday, but policymakers on both sides of the Atlantic did not appear to take decisive action, underscoring the chaos of the financial crisis.

Twelve global banks that have been publicly linked to the Libor rate-rigging scandal face as much as $22bn in combined regulatory penalties and damages to investors and counterparties, according to Morgan Stanley estimates.