http://www.euronews.com/ The British government has called in the fraud squad to investigate possible crimes and will tighten laws over attempts to manipulate interbank lending rates.

That scandal has engulfed Barclays – which will pay 364 million euros to settle allegations – and is set to spread to other banks.

Barclays chief executive Bob Diamond acknowledged that the settlement would damage customer trust in the bank.

British Prime Minister David Cameron said: “This is a scandal, it’s extremely serious. They’ve paid a very large fine and quite rightly but frankly the Barclays management team have some big questions to answer. Who was responsible? Who was going to take responsibility? How are they being held accountable?”

Nicholas Dunbar, author of ‘The Devil’s Derivatives’ said the manipulation of the London interbank rate – known as Libor – reveals problems with the system: ”The people in the casino, the derivatives traders with their trillions of bets, are influencing this rate, which is supposed to be old fashioned interbank lending, and it has been completely contaminated by these traders, and you see these emails quoted in the Financial Services Authority report saying ‘There’s a bottle of Bollinger for doing this for me’.”

Barclays is the first bank to settle, but the British regulator the FSA and its US counterpart are investigating others including Citigroup, HSBC, Royal Bank of Scotland and UBS.

The Libor rate, compiled from rates that banks pay each other for loans, is used throughout the financial system to set loan rates around the world.

The investigation – which disclosed e-mails in which bankers appeared to promised bottles of champagne to thank each other for help in setting the rates – has added to a storm of anger against the financial industry.

“Done … for you big boy,” read one message sent by a Barclays banker to one of the lender’s traders, who had asked him to fix a key lending rate artificially low.

In another message, after Barclays submitted a rate that was lower than the previous day’s, an external trader says: “Dude, I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger.”

British Finance Minister George Osborne said the e-mail exchanges “read like an epitaph to an age of irresponsibility”.

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