Labour leader Ed Miliband said the once-lauded banking sector has fallen into disrepute, claiming that over the last 20 years the word "banker" has gone from a compliment "to a gross insult."
The British public "will not tolerate anything less than a full, independent and open inquiry" that will investigate every part of the industry, he said during a speech at the left-wing Fabian Society think tank.
U.S. and British agencies on Wednesday imposed fines totaling $453 million on Barclays for submitting false data used in setting the London interbank offer rate (LIBOR), a key market index, between 2005 and 2009, to make its financial position appear stronger.
U.S. and British investigators say the employees of Barclays—and possibly those of other major international banks—clearly knew it was wrong to manipulate the London interbank office rate. The scandal has added fuel to public anger at the banking industry, whose executives face mounting accusations of being overpaid and unethical, and politicians from across the political spectrum were taking on the industry with tough language.
Business Secretary Vince Cable, a member of the Liberal Democrats, the junior partner to the Conservatives in Britain's coalition government, described the country's financial sector as "a massive cesspit."
Justice Secretary Ken Clarke, a Conservative, said bankers who commit financial crimes must be brought to trial, telling the BBC that he suspected "financial crime is easier to get away with in this country than practically any other sort of crime."
The Royal Bank of Scotland, one of the banks that was bailed out by taxpayer money in the 2008 financial crisis, has also said it was being investigated for a similar scam. Britain's main financial regulator, the Financial Services Authority, uncovered serious failings in the way complex financial products have been sold to small businesses.
The British government bought up large chunks of the country's banking system after it ran into major financial difficulties during the 2008 credit crunch. Royal Bank of Scotland and Lloyds Banking Group were two of banks that had to be rescued. Barclays did not need a public bailout at the time.
Bob Diamond, chief executive of Barclays bank will appear before lawmakers next week to answer questions about the scandal.