Breaking

BoU Assures Barclays' Customers Over Interest Rate Scandal

Bank of Uganda has assured Ugandans, particularly customers of Barclays Bank, that the scandal over cooked up lending rates shaking the global bank\'s headquarters in London, won\'t affect its local subsidiary in Uganda.
Bank of Uganda has assured Ugandans, particularly customers of Barclays Bank, that the scandal over cooked up lending rates shaking the global bank's headquarters in London, won't affect its local subsidiary in Uganda.

Addressing journalists today in Kampala, the deputy governor of the Bank of Uganda Louis Kasekende said the scandal has no impact whatsoever on Barclays Bank in Uganda.

Kasekende, however, said the scandal justifies the need for a global regulator of banks and other financial institutions who would take action in the event that any bank violates any financial ethic.

Last week Barclays, one of the biggest banks in the world, was fined for trying to manipulate inter-bank lending rates, sparking a government inquiry and calls for criminal investigations.

Regulators in the US and UK fined Barclays 450 million dollars for attempting to manipulate interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.

Barclays’ staff reportedly did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress.

Investigations are continuing in the UK and the US into other banks over interest rate fixing, including criminal investigations by the Department of Justice. The Serious Fraud Office in the UK is looking into possible criminal prosecutions.

The scandal has since claimed two top Barclays’ executives, the chairman Marcus Agius and the chief executive Bob Diamond, who have all resigned.

The BoU deputy governor said when something goes wrong someone has to take responsibility. He assured the bank customers in Uganda that the hefty penalty has no effect on their savings.

Keywords