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Inter-bank lending to be reviewed
An urgent independent review into the inter-bank lending rate is to be set up by the Government next week in the wake of the interest rigging scandal.
The review will consider the future operation of the Libor rate and the possibility of introducing criminal sanctions, a Treasury source said.
Bob Diamond, the chief executive of Barclays - the first bank to be exposed in the scandal - has been summoned to appear before the Treasury Select Committee next Wednesday.
The review comes amid Labour demands for a full public inquiry into the affair. The Government believes its approach will ensure a speedier response to the issue, resulting in amendments to the Financial Services Bill this summer.
The review will be headed by an as-yet-undisclosed independent figure. It will look into the current regulatory arrangements for the Libor and whether criminal sanctions for manipulation can be introduced.
Ministers are considering setting up a separate review into the professional standards of bankers.
MPs on the Treasury Select Committee will grill Mr Diamond over who at Barclays knew about the Libor "scam" and how the issue had been dealt with. The committee has also asked the bank's chairman Marcus Agius and other non-executives to appear on Wednesday.
PM David Cameron said: "It's very important, above all, that government takes all of the actions necessary, holding bankers accountable, making sure they pay their taxes, making sure there's proper transparency, making sure the criminal law can go wherever it needs to, to uncover wrongdoing, all of these things need to happen."
As to calls for an inquiry, he said: "Let's take our time, think this through carefully... That's what I'm determined to do, and that's what we will do."
But Labour leader Ed Miliband accused the Government of adopting "sticking-plaster solutions" and criticised the Prime Minister as being "out of touch".