29 Jun 2012

Bank stocks fall after interest rate rigging scandal

1:32 pm on 29 June 2012

In Europe, banking stocks have fallen after Barclays was fined $US450 million fine for rigging interest rates.

British Prime Minister David Cameron says Barclays chief executive Bob Diamond has serious questions to answer and Chancellor George Osborne says criminal charges can't be ruled out.

Mr Diamond has insisted he will not resign, the BBC reports

The scandal has hit Barclays shares, which ended Thursday trading down 15.5%.

Other banks shares also fell, with Royal Bank of Scotland losing 11.5%, Lloyds down 3.9%, and HSBC giving up 2.6%.

Meanwhile, Barclays and other banks face the threat of criminal investigation in the UK over the scandal.

Royal Bank of Scotland has said that it expects to reach a settlement in a few months. One report said the bank faced a fine of £150m for market manipulation but RBS said it did not recognise that figure.