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LibDems call for more FSA resources to tackle Libor

FSA Letters 480

The Liberal Democrats are calling for more resources to be pumped into the FSA to investigate the Libor rigging scandal and punish wrongdoing.

The party’s autumn conference in Brighton supported a policy motion to give the regulator the necessary resources to impose the “maximum possible penalties” on banks for regulatory breaches.

In particular it said individuals who have broken their customers’ trust should also face the maximum penalties possible.

The party also backed the FSA’s Wheatley Review into Libor and called on Lib Dem parliamentarians to continue their support for the Parliamentary Commission on Banking Standards.

The Financial Times today reports the British Bankers’ Association has formally voted to give up its role overseeing Libor. The FT reports a new regulatory structure for Libor will be announced on Friday as part of a package of reform measures.

The LibDems also called on the Government to consider the creation of a professional body for bankers to ensure best practice is followed in the industry.

The party wants the Serious Fraud Office to be allocated the necessary resources to pursue prosecutions of bankers who have broken the law.

Liberal Democrat Treasury spokesman Stephen Williams said: “The Libor manipulation scandal was just another example of what has gone wrong in our nation’s banking industry. Public trust has been damaged and we now need to punish those guilty of wrongdoing in the Libor scandal.

“We need to see a fundamental culture shift in our banking sector to improve standards and boost lending for businesses.”

The party also backed the funding for lending scheme and called on banks to use it to boost net lending. Yesterday it was revealed there are 13 lenders, with 73 per cent of all UK lending, using the scheme.

It re-iterated yesterday’s motion for greater transparency over lending patterns by region and sector and for MIPS to report instances of businesses being rejected credit to the parliamentary commission.

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