International

THE Serious Fraud Office (SFO) has confirmed that it has formally launched an investigation into the rigging of the inter-bank lending rate, Libor.

Earlier this week, it said it was considering whether criminal prosecutions would be possible.

An SFO spokesperson confirmed that a dedicated case team had now started work.

Its involvement follows an investigation by US and UK regulators into the manipulation of Libor.

Last week, Barclays agreed to pay a record £290m fine after its traders tried to rig the key interest rates, sometimes working with staff at other banks.

The SFO would not say who was under investigation. Its short statement said only: “The SFO Director David Green QC has today decided formally to accept the Libor matter for investigation.”

The Libor affair, described by the prime minister as a scandal, has led to the resignation of three of Barclays’ most senior executives, including chief executive Bob Diamond.

He appeared before MPs on the Treasury Select Committee this week, when he called the behaviour of those responsible for Libor rigging at the bank “reprehensible”.

Regulators in the UK and the US found that Barclays staff had tried to affect the rate over a number of years, first for profit and then to reduce concerns about how much it was being affected by the financial crisis.