Barclays scandal rattles global finance

The Barclays rate-rigging scandal is sending shockwaves through world finance, putting ethics and regulation under scrutiny, and raising the prospect of criminal charges in a sector-wide global probe.
Britain's Serious Fraud Office said on Friday it will investigate the interbank rate manipulation scandal which has engulfed Barclays, forced three top resignations, tainted the City of London and sparked a political firestorm.

Barclays was fined £290m by British and US regulators just over one week ago, for attempted manipulation of Libor and Euribor interbank interest rates between 2005 and 2009.
Barclays, which is the parent company of Absa Group [JSE:ASA], became the first bank to be fined as part of a global probe into suspected manipulation of the twin interest rates that are crucial to the operation of short-term financing and global markets.

British lawmakers voted on Thursday to hold a parliamentary investigation into the scandal, instead of a full judicial inquiry.

"This is a multi-bank issue - albeit evidence and fines for other culpable banks will probably dribble out over a period of many months or years," said Ian Gordon, banking sector analyst at Investec.
"In broad terms, the issue itself and the associated fallout are damaging for the financial sector, both in reputational terms, the costs of investigation and fines - and any potential redress.

"Moreover, the issue helps to distract from and hence damage any initiatives to increase the flow of lending to the economy, with obvious negative consequences," Gordon said.