The Serious Fraud Office confirms that three British nationals have been taken to a London police station as part of the investigation into the rigging of the Libor interbank lending rate.

Three arrested in Libor-rigging probe

The three men - aged 33, 41 and 47 - were arrested in connection with the investigation into the manipulation of Libor, following searches at a property in Surrey and two premises in Essex.

Allegations of a banking conspiracy have resulted in five criminal probes and forced Barclays to pay a record fine of $461m to the US Justice Department and UK FSA. Bob Diamond resigned as chief executive of Barclays last July but denied being aware the Libor scandal was going on at the time.

Traders at Barclays were found to have rigged Libor to boost their profits and bonus rewards, while the bank was accused of lowering submissions to alter the perception of the lender's finances.

Roughly 20 financial institutions have been investigated over the alleged rigging of the benchmark interest rates that govern $500tr of contracts worldwide, covering everything from from household mortgages to complex derivatives.

The SFO started to investigate Libor manipulation in July and worked closely with the FSA to inquire into the entire banking sector.

The arrests come after speculation that the Swiss banking giant UBS is in settlement talks with regulators over alleged Libor rigging.

The Royal Bank of Scotland has previously said it hopes to settle any claims over Libor manipulation quickly and warned that any potential penalties could be significant.

UBS is currently on course to reach an agreement before Christmas and is facing a substantial fine of more than $450m.

An independent review into Libor practices called for a new body to regulate the inter-bank lending rate, but fell short of scrapping the benchmark.

Article Tags