Three men arrested in connection with an investigation into the manipulation of Libor, the interbank lending rate, were an ex-trader who worked for UBS and two interdealer brokers, according to a report.
The arrests were made on Tuesday in London, the Serious Fraud Office (SFO) said. Tom Hayes, 33, a former trader who has worked in London and Tokyo and who specialised in products pegged to yen-dominated Libor, was taken to Bishopsgate police station following a search of his home, the Financial Times reported.
Terry Farr and Jim Gilmour, two employees of RP Martin, a London-based interdealer broker, and believed to be known to Hayes, were also questioned, the newspaper said.
At the height of the banking scandal this summer, the SFO revealed it had been working closely with the Financial Services Authority (FSA). The Government department, which is responsible for investigating and prosecuting serious and complex fraud, launched an inquiry into the entire banking sector.
It came after a number of traders at Barclays were found to have rigged Libor to boost profits and bonus rewards, while the bank was also accused of lowering submissions in a bid to alter the perception of the lender's finances.
The claims ultimately led to the resignation of Barclays boss Bob Diamond, sparked a criminal investigation and became the focal point of a bitter row in Westminster over ethics in the banking sector.
The arrests follow speculation that Swiss banking giant UBS has started settlement talks with regulators over alleged Libor rigging. UBS is reportedly on course to reach an agreement before Christmas and is facing a fine of more than 450 million US dollars (£280 million).
Around 20 financial institutions have been investigated over the alleged rigging of benchmark interest rates which govern 500 trillion US dollars (£310 trillion) of contracts worldwide, ranging from household mortgages to complex derivatives products.
Taxpayer-backed Royal Bank of Scotland has previously said it hopes to settle any claims over Libor manipulation soon and warned that potential penalties could be significant.
Focus on the banking sector has intensified once again as HSBC revealed a 1.9 billion US dollars (£1.2 billion) settlement for failing to comply with anti-money laundering rules, and Standard Chartered paid out an additional 327 million dollars (£203 million) over allegations that it breached sanctions over Iran.