Icap confirms probe over Libor

City A.M. Reporter

ref="http://www.cityam.com/company/icap">ICAP confirmed yesterday it was being investigated by the Financial Services Authority (FSA) over Libor setting, making the world’s largest broker the first non-bank to confirm it has been linked with the scandal over fixing the lending rate.

As an inter-dealer broker, Icap acts as an intermediary between the world's largest investment banks, many of which are involved in setting the Libor rate.

Icap does not contribute to the Libor setting process but regulators have called into question the role that individual brokers, at Icap and rival firms, may have played as conduits to manipulation by traders working at investment banks.

Icap said in a regulatory filing it had been told by the FSA that one of its subsidiaries was under investigation.

“The investigation is confidential, accordingly no further comment will be made at this stage,” the broker said in a statement.

More than a dozen banks around the world have been scrutinised by regulators as part of an investigation into the suspected rigging of interbank rates, which are used to price trillions of dollars of financial instruments.

Shares in Icap closed down 0.95 per cent at 324p yesterday, having slumped as much as three per cent in earlier trading.