LIBOR (FSA Investigation)

Mike Gapes Excerpts

Thursday 28th June 2012 Commons Chamber

[Mr Osborne]

HSBC and RBS are two of the banks under investigation, but international banks such as UBS and Citigroup are under investigation too, partly for activities conducted in this country.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Chancellor referred to the costs and penalties that the general public have suffered. Is there any estimate of how much per head ordinary people in this country have suffered from the activities of a group of corrupt banksters?

[Mr Osborne]

First, I hope the hon. Gentleman does not mind me saying on behalf of the whole House that we very much welcome him to his place. He has the deepest sympathy of the whole House for the tragedy in his family. It is good to see him back here.

There is no estimate of the cost to individuals or consumers, and it would be very difficult to construct one. We are talking about the daily rate set, in the case of these abuses, over a three or four-year period, and it was used to set mortgage rates, loan rates and all sorts of other things. Sometimes the rate was manipulated to be too low and sometimes it was manipulated to be too high compared with the true market price. We do not have an estimate, but it is clear that, as the FSA says, the manipulation contributed to the risk to the entire financial system, which then, in effect, collapsed, not because of that, but as part of the culture we have been talking about, and the country has paid many billions for that.