In response to intense political pressure, British Chancellor of the Exchequer George Osborne is shortly expected to announce an independent inquiry into the banking industry.
The recent revelations that Barclays had deliberately fixed the inter-bank landing rate has resulted in mounting pressure upon the government to commission an independent inquiry into banking practices. George Osborne is expected to announce this afternoon that he will commission such an inquiry. However, it is thought that it will not be a public, judicial inquiry. A spokesperson for the government ruled out a full inquiry on the ground that:
We know what happened.
It is thought the government would like the inquiry to be brief, so as to enable any recommendations to be incorporated into the Financial Services bill, which is currently before parliament.
However, it is highly unlikely that such a limited inquiry will satisfy the opposition. Ed Miliband, the leader of the Labour Party, has been very vocal in his demands for a full, public inquiry. Indeed, Miliband has repeatedly called for criminal prosecutions.
Whilst, a narrow and brief inquiry would doubtless suit the government, it is difficult to see how such a limited inquiry would satisfy the critics of the banking system. Barclays, which last week was fined £290 million for malpractice, is only the first outcome of a series of investigations being undertaken by the regulators. Citigroup, HSBC, RBS and other banks are also being investigated. Euan Stirling, Standard Life Investments, told BBC Radio Four:
I think this is going to spread far and wide through the industry
Indeed, only this morning, Marcus Agius, Barclays Chairman, was forced to resign over the scandal. Unfortunately for Barclays, which doubtless hoped the move would appease its critics, the resignation has not reduced the clamour for the resignation of its Chief Executive, Bob Diamond.