Three arrested in UK over Libor rate fixing scandal

The UK anti-fraud agency has arrested three men in connection with the Libor interest rate manipulation scandal that broke earlier this year.

According to Britain's Serious Fraud Office, the three British men are aged 33, 41 and 47 and are all currently living in the United Kingdom. They have been taken to a London police station for questioning. 

The Fraud Office opened its investigation in July after Barclays was fined $435 million by American and British agencies over alleged Libor interest rate manipulation. Barclays is the only bank to have admitted to attempting to rig Libor, with the scandal prompting the bank’s chief executive Bob Diamond to step down. 

Currently over a dozen global banks, including Citigroup, HSBC, Credit Suisse and Deutsche Banks are under investigation in the UK, US, Japan and several other countries for allegedly providing false figures on borrowing rates between 2005 and 2009.

Libor was invented by the British Bankers’ Association (BBA) in 1986 as an average rate for interbank lending. It is generated through a daily survey of 16 prime banks and calculated for 10 currencies. Libor influences the costs of several financial instruments, including corporate loans, inflation swaps, home mortgages and currencies.