FSA to publish internal Libor probe 'within weeks'

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The Financial Services Authority (FSA) will publish its internal review into when it first knew about banks rigging the Libor benchmark within weeks, before the watchdog is scrapped.

The watchdog told parliament's Treasury Select Committee in a written submission released to the media that the review was being conducted by its internal audit division.

The FSA was responding to the committee's report last year on the Libor scandal. Two UK banks, Barclays and Royal Bank of Scotland have been fined for manipulating the London Interbank Offered Rate, use a reference rate in transactions from home loans to credit cards.

Members of the committee were concerned the watchdog was two years behind U.S. regulatory authorities in starting formal probes. The FSA said in its submission it had worked jointly with the U.S. authorities from 2008 onwards.

The committee wants the FSA's internal probe published.

"The Treasury Committee will consider the FSA's review into its own awareness of inappropriate Libor submissions when it is finalised," the committee's chairman Andrew Tyrie said in a statement on Thursday.

"Some of the evidence we hear suggests early warning signs may have gone unheeded," Tyrie said.

An FSA spokesman said the review is expected to be published within the next two to three weeks.

The committee has been pressing the FSA to give greater encouragement to whistleblowers from banks to report wrongdoing.

"We are currently preparing a note on incentivising whistle blowing without moral hazard," the FSA said in its submission. FSA head of enforcement Tracey McDermott has already told parliament she does not favour paying whistleblowers.

The FSA will be scrapped at the end of March and its powers divided between the Bank of England and a new standalone Financial Conduct Authority as part of a post-crisis shake-up.

Source: Reuters