The scandal over wholesale interest rate manipulation is widening to pull in senior Conservative party figures, according to the Independent on Sunday
The Independent on Sunday has learnt that the Conservative deputy chairman, Michael Fallon, is a board member of a leading brokerage firm that dominates the rates market and which has been asked to co-operate with the Financial Services Authority's investigation into malpractice across the City.
Mr Fallon is a close ally of David Cameron and a senior member of the Treasury select committee that will question the Barclays chief executive, Bob Diamond, this week, prompting demands from Labour that he should declare an interest. The Prime Minister continues to resist calls from Ed Miliband for a Leveson-style inquiry into rate-fixingTories involved in City scandals. Who would a thunk it?The questions over the role of Mr Fallon followed the revelation that one of the Prime Minister's closest advisers, the former Tory party treasurer Michael Spencer, is under scrutiny by the FSA. Mr Spencer's brokerage firm ICAP is one of a number of institutions alleged to have helped to manipulate bank interest rates while he was treasurer of the Conservatives. Mr Cameron said yesterday that he needed to "think this through carefully" whether there should be a judge-led inquiry into the Libor scandal