Page last updated at 19:12 GMT, Tuesday, 20 November 2012

Financial Services Bill

A Labour peer has told the House of Lords he finds it "astonishing" that UK regulators were unaware that banks were trying to fix a key inter-bank lending rate.

Earlier this year Barclays was fined £290m after trying to manipulate Libor. Other UK banks have been implicated in the scandal.

Lord Barnett was speaking during a debate on government amendments to the Financial Services Bill aimed at "restoring global confidence" in Libor, on 20 November 2012.

He said: "Given the interest in this whole question of how interest rates are set - that applies to the Bank of England, the Treasury, the Financial Services Authority, the authority that was supposed to be regulating it, the BBA [British Bankers Association] - they all knew nothing whatsoever about this manipulation. I for one find that astonishing."

Lord Barnett asked Treasury Minister Lord Sassoon whether criminal sanctions introduced by the bill to prevent a repeat of the scandal could be applied retrospectively, "because somebody is surely guilty here of knowing about it and turning a blind eye".

Responding to his remarks later on, Lord Sassoon said it was an "absolute principle" not to put in place retrospective criminal offences because it would be against human rights legislation.

He told the Lords the raft of new laws would demonstrate that unscrupulous behaviour would "not be tolerated" in the UK.

The laws implement many of the reforms put forward by Financial Services Authority managing director Martin Wheatley in his report.

Lord Eatwell said Labour was "broadly supportive" of most of the reforms but some were "not quite right".

Peers later accepted the string of amendments without a vote.

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