Therefore, I expect other banks -- in the UK, US and elsewhere -- to be engulfed by this scandal. If any of the global banks, such as HSBC (LSE: HSBA.L - news), JP Morgan Chase or Citigroup (NYSE: C - news) admit similar charges, then their fines could dwarf those levied on Barclays.
Furthermore, although Barclays has settled with UK and US regulators, there will be many more civil -- and even criminal -- lawsuits in the pipeline. This threat should trouble shareholders in HSBC, Lloyds Banking Group (LSE: LLOY.L - news) and Royal Bank of Scotland (LSE: RBS.L - news), as all three British banks have been named in Libor lawsuits.
With this scandal now out in the open, spooked bank shareholders raced for the exits.
Here's how the shares of the Big Four banks have performed since news of these settlements broke on Thursday (from largest to smallest fall):
As you can see, Barclays and RBS shares got hammered on Thursday, losing nearly 16% and 12% respectively. Lloyds got away with a 4% drop, while HSBC slid less than 3%.
Shunning bank shares
Even five years after the credit crunch arrived, the banking world is still not back to 'normal', which is why I avoid UK banks like the proverbial plague. I don't own any bank shares today and have bought none since 2007.
Britain's biggest investor, Neil Woodford -- who manages £20 billion of our money for Invesco Perpetual -- also shuns bank shares. To find out which great British businesses Woodford is buying, read "Eight Shares Britain's Super-Investor Owns". For more about these eight money-making machines -- and Woodford's magnificent mind and methods -- download your free copy of this report today.
Without doubt, the rigging of Libor is shaping up to be the most serious financial scandal of the 21st Century. Indeed, if criminal charges succeed against any bank involved, then they could well spell the end of that institution. So, watch this space...
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