Statement issued “given the degree of public concern about recently reported issues in the banking sector”
The Crown Office has confirmed it is leading an investigation into the Scottish banking sector.
It issued a statement confirming the investigation, “given the degree of public concern about recently reported issues in the banking sector”.
The statement adds: “The Crown has decided to confirm that an investigation has been under way for some time.
“Its scope will now be extended as a result of recent developments”.
These recent developments are believed to relate to Barclays Bank's admission to having manipulated inter-bank lending rates over four years between 2006 and 2009.
Royal Bank of Scotland (RBS) has admitted it is also being investigated by the Financial Services Authority and US regulators in relation to allegations over its role in fixing the London InterBank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR), the two most important benchmark interest rates in global markets.
RBS is reported to have sacked four of its traders at the end of last year for their alleged involvement in LIBOR fixing.
Edinburgh-based RBS is one of 16 banks currently being investigated for rigging LIBOR and EURIBOR rates.
Lloyds Banking Group, created in 2008 from the merger of Lloyds TSB and Halifax Bank of Scotland, is one of the banks named in the wider inter-bank lending rate probe.
The Crown Office says its investigation into the banking sector is “on-going”, though no details have been released on how long the investigation has been open, which banks are being investigated or on what allegations the investigation is based.
The Serious Organised Crime Division is leading the investigation, and is coordinating the investigation with the support of regional Procurators Fiscal.
In Scotland, fraud is dealt with under common law.
The Crown Office investigation is believed to centre on representations made by Scottish-based banks to their shareholders in the run up to their respective share rights issues.
It is a criminal offence, under company law, for a business to provide misleading information on its financial health.
The Crown Office has now said the scope of its original investigation has “widened”, believed to be a direct reference to the LIBOR fixing scandal.
Business Secretary Vince Cable has called for a criminal investigation into the rate fixing scandal, saying he could not understand how those who perpetrated “what looks like a conspiracy” have been allowed to “just walk away”.
The Treasury has since confirmed earlier statements from the FSA that there are currently no criminal sanctions in place covering manipulation of inter-bank lending rates.
And the Serious Fraud Office (SFO) last year opted not to continue with its criminal investigation into manipulation of inter-bank rates because of cuts to its budget.
The SFO's budget has been cut from £52 million in 2008 to £32 million in the current financial year.
Richard Alderman, who was director of the SFO before stepping down in April, decided the Office of Fair Trading and the FSA were better placed to lead an investigation into LIBOR fixing.