The Serious Fraud Office (SFO) is considering bringing criminal prosecutions against bankers involved in the Libor interest rate rigging scandal, it emerged today (2 July).

Chancellor George Osborne announced last week that the Financial Services Authority (FSA) was not able to impose criminal sanctions for the manipulation of Libor – the benchmark interest rates used in financial markets around the world – due to the limited scope of its criminal powers.

However, the SFO – which has been working closely with the FSA – could investigate whether bankers complied with the Fraud Act of 2006 and whether false accounting took place between 2005 and 2009.

An SFO spokesperson commented: "The SFO has been working closely with the FSA during its investigation into recently reported issues in relation to Libor. Now that the investigation into the issue of regulatory misbehaviour has concluded, the SFO is considering whether it is both appropriate and possible to bring criminal prosecutions.

He added: "The issues are complex and the assessment of the evidence the FSA has gathered will take a short time, but we hope to come to a conclusion within a month. The SFO is aware of investigations in other jurisdictions and is working with the relevant authorities."

The latest developments come as Prime Minister David Cameron (pictured) today (2 July) confirmed plans for an inquiry into the banking sector, stating the intention to introduce "the toughest and most transparent rules on pay and bonuses of any major financial centre in the world."

The news comes a year after former SFO director Richard Alderman decided against a criminal investigation into Libor rigging, citing limited resources as a reason for the decision. Alderman stated at the time that the FSA and the Office of Fair Trading would be better placed to lead such a review, adding that he did not want to duplicate the efforts of those agencies.