Pressure on Barclays boss to quit

Pressure is mounting on Barclays boss Bob Diamond to step down following the rate-rigging scandal that has rocked the banking industry.

Shares in the lender arre down 8% as Prime Minister David Cameron said the bank had "some serious questions to answer" and Opposition leader Ed Miliband called for a criminal investigation.

Mr Diamond waived his annual bonus for 2012 on Wednesday after the bank was fined £290 million by US and UK regulators for manipulating the rates at which banks lend to each other to boost its profits.

Lord Oakeshott, a former Liberal Democrat Treasury spokesman, described the bank as "a casino that was rigging the wheels and loading the dice", adding: "If Bob Diamond had a scintilla of shame, he would resign. If Barclays' board had an inch of backbone between them, they would sack him."

The controversy, which was illustrated in a series of emails between traders and Barclays staff, could spread to other lenders, including HSBC and taxpayer-backed Royal Bank of Scotland.

Addressing the scandal in a speech to the Unite union conference in Brighton, Mr Miliband said: "When ordinary people break the law, they face the full force of the law. The people who have done the wrong thing should face the full force of the law, including criminal proceedings. The Government should urgently look at the regulation of banking in this area so this never happens again."

The penalties from UK and US regulators, including a record £59.5 million fine from the Financial Services Authority (FSA), followed claims that Barclays manipulated the Libor (London Interbank Offered Rate) and Euribor interbank lending rates.

The rates are set on wholesale money markets - where banks lend to each other - which in turn affects rates they pass on to customers through credit cards, loans and mortgages. In the depths of the financial crisis, Barclays gave false information about the interest rates it had to pay to borrow money in an effort to paint a false picture of its health to markets.

George Osborne updated MPs on the FSA report, which he said was "a shocking indictment of the culture of banks like Barclays in the run-up to the crisis". The Chancellor said he would look at strengthening the criminal sanctions available to the FSA. And he said the Financial Services Bill could be amended in response to the scandal.

Mr Osborne told the Commons that the FSA was continuing its investigations into a number of financial institutions, in co-operation with regulators abroad: "But it is already clear that the FSA's investigation demonstrates systemic failures at the heart of the financial system at the time."