LONDON - Britain's parliament will investigate an interest-rate fixing scandal that has rocked London's banking sector, in a wide-ranging inquiry that a source said would encompass issues such as culture and standards in the industry.

Meanwhile, the country's Serious Fraud Office (SFO) said on Monday it would decide within a month whether to press criminal charges against any of the banks under investigation.

"I want us to establish a full parliamentary committee of inquiry involving both houses," Prime Minister David Cameron told parliament, stopping short of giving further details on its full remit.

"This committee will be able to take evidence under oath, (and) it will have full access to papers and officials and ministers, including ministers and special advisers from the last government," he said.

Foreign investor interest in South Africa's banks could be bolstered by the scandals battering some of the world's leading lenders, who have been struggling to regain lost credibility among investors and the public since they caused the 2008 financial crisis.

In the UK, the government has come under increasing pressure to take a closer look at the banking sector, which has felt the force of public anger since taxpayers bailed out several banks during the 2008-09 crisis.

That pressure intensified last week when Barclays was fined for trying to manipulate the London interbank offered rate (Libor), used worldwide as a benchmark for prices on about $350-trillion of derivatives and other financial products.

The opposition Labour party had threatened to trigger a vote in parliament on whether there should be a judge-led independent inquiry into the banking sector's excesses, culture and blunders.

The UK source said the investigation would be "wider than a narrow review into Libor and criminal sanctions ... (and) will encompass culture and sanctions".

Finance Minister George Osborne urged the SFO on Monday to use all legal options open to it, and said urgent changes were needed to the regulation of Libor and other markets.


The British government is likely to come under fire for not establishing an independent inquiry - similar to the current Leveson inquiry that is investigating standards in the media.

However, some ministers may be wary of any investigation that could make their own planned overhaul of the industry's regulatory regime look inadequate.

While it is politically expedient to "bash the bankers", the Conservative-led government will also be wary of attacking a crucial sector in Britain's economy that is still struggling to function properly after the credit crunch.

Labour leader Ed Miliband has called on Barclays CEO Bob Diamond to resign after the bank's involvement in the rate-fixing scandal became clear. That case is likely to be just the tip of the iceberg, with several other banks under scrutiny for trying to manipulate Libor.

Barclays chairman Marcus Agius fell on his sword in an effort to stem the scandal, but critics say that is not enough and that the whole industry needs to change.

"I want to see a new code of conduct for bankers ... For all we know, some of the people who were part of this scandal might still be working in other banks," Mr Miliband told ITV on Monday. "There also needs to be that full inquiry, that full public inquiry into exactly what has happened throughout our banking industry."

John Mann, a Labour politician and a member of a panel of lawmakers who will grill Mr Diamond on Wednesday and Mr Agius on Thursday, told Sky News: "The buck in Barclays stops with Bob Diamond, and it is Bob Diamond who must accept responsibility.

"He (Diamond) must resign. He's got to go. There is no role for people like him if banking is to be trusted again in this country and if British banking is to restore its tarnished reputation in the world, which of course is of great importance to our economy."