Bank of France Governor Christian Noyer said yesterday he was “shocked” by revelations that a key inter-bank lending rate had been rigged, and that those responsible should be prosecuted for “criminal behaviour”.

Mr Noyer told Europe 1 radio: “I am obviously shocked by what happened. This shows there needs to be rigid regulation.”

“There is clearly criminal behaviour in the manipulation of Libor,” he said. Asked if those behind it should be prosecuted, he said: “Of course.”

Libor, the London Interbank Offered Rate, is a flagship London instrument used as an interest rate benchmark throughout the world, while Euribor is the eurozone equivalent.

The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.

In regards to French banks, “they have been questioned by the competent authorities and the answers apparently were satisfactory because at this stage there has been no follow-up,” Mr Noyer said.

“For the moment, no one has said nor expressed the idea that they (French banks) participated,” he said.

Major banks are under investigation in the United States, Britain, Canada, Japan, the European Union and elsewhere for having allegedly rigged the setting of Libor and other essential interbank lending rate averages.

Barclays Bank has already been fined €368 million by US and British regulators for fixing Libor, and at least in the United States a number of lawsuits have been filed over claimed losses tied to the rate fixing.

The US Federal Reserve published documents last week showing that there were already suspicions in the markets of manipulation of the Libor rate in 2007 and that the Fed and the Bank of England both had evidence of it in 2008.

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