Lord Paul seeks intensive probe into UK banking crisis

London: NRI industrialist Lord Swraj Paul has demanded an intensive probe into the raging banking crisis in Britain, saying the Libor fixing has hurt the reputation not only of the financial services but the country as a whole.

Participating in a debate on the "international competitiveness of UK industry" in the House of Lords last evening, Lord Paul said: "The biggest issue at the moment for industry is the banking crisis. This is so fundamental to our national economy that it must be investigated intensively, and resolved.

"And resolution must avoid any political point scoring, as the whole country needs to have its faith restored in the financial sector. The Libor fixing has really adversely affected everyone. It has also hurt the reputation not only of the UK financial services, but the country as a whole. We cannot afford that."

The debate comes in the wake of Barclays chief executive Bob Diamond`s resignation after the bank was fined 290 million pounds last week after some of its derivatives traders were found to have attempted to rig Libor – the London inter-bank lending rate.

Libor is considered to be one of the most crucial interest rates in finance and it underpins trillions of pounds worth of loans and financial contracts. So when Barclays was fined, public confidence in banks was shattered. The scandal forced Diamond to resign.

At the outset, Lord Paul, Chairman of the Caparo Group – an industrial manufacturing company, noted "the issue of competitiveness is vital for the future of our country`s economy. And nowhere is this more significant than in manufacturing. Having been intimately engaged in this activity all my life, your Lordships will appreciate why I will focus largely on this sector."