Rotten to the Core: Barclays Paying $453 Million to Settle Libor Probe
June 28th, 2012Via: Reuters:
U.K. bank Barclays will pay $453 million to U.S. and British authorities to settle allegations that it manipulated key interest rates, increasing pressure on other banks to cooperate in a probe that could cost the financial industry billions of dollars.
The settlement raises fresh questions about the reliability of the London interbank offered rate, or Libor, which underpins some $360 trillion of loans and financial contracts.
The attempted manipulation, which according to authorities took place from 2005 through 2009, meant that millions of borrowers paid too little or too much interest on their debt.
The U.S. government implicated senior executives at Barclays in its settlement. It cited reams of emails that showed how the bank sought to move Libor rates to profit on trades and to hide its high borrowing costs during the financial crisis.
Barclays Chief Executive Bob Diamond acknowledged on Wednesday that the settlement would damage customer trust in the bank. He said he and other senior executives would forgo their bonuses this year. Much of the improper trading and manipulation occurred under the watch of Diamond, a fixed-income trader who replaced John Varley as CEO in 2011.
Libor underlies everything from derivatives trades to U.S. consumer credit card rates to loans as far afield as those financing Turkish phone networks. Barclays also tried to manipulate Euribor, a separately managed series of euro-denominated rates.
Related: Why the Global Political Class Lies in Fear of the LIBOR Scandal [Thanks, HPLovecraft666]
Sorry they’re all from DailyMail but that’s where I happened to be a moment ago:
20 more banks were rigging interest rates: British bankers now facing criminal inquiry over scandal that was kept secret for years
http://www.dailymail.co.uk/news/article-2166242/20-banks-rigging-rates-British-bankers-facing-criminal-inquiry-scandal-kept-secret-years.html
A new nightmare on Wall Street? U.S. banks face criminal probe into global interest rate-fixing scheme as Barclays blows the whistle on America’s financial giants
http://www.dailymail.co.uk/news/article-2166198/Interest-rate-scandal-Will-Barclays-turn-banks-involved-massive-scheme.html
How many other banks will be drawn into the market-rigging scandal? Barclays is just the tip of the iceberg, say U.S. investigators
http://www.dailymail.co.uk/news/article-2166012/Libor-scandal-FSA-US-criminal-probe-banks-pay-billions-damages.html