Barclays LIBOR Scandal

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Barclays LIBOR Scandal

LIBOR stands for London Interbank Offered Rate and is calculated in 10 currencies by taking the average of bids made by leading banks (usually 6 to 18 to remove outliers) for lending rates in London when lending to other banks.
LIBOR rates are fundamental benchmarks for setting prices of $350 trillion of financial products.
Barclays admitted traders attempted to manipulate LIBOR rates to paint a false picture of market health.
The Bank deliberately submitted lower bids to the panel that sets the LIBOR rate.
Barclays was fined £290 million by British and US regulators.
Bob Diamond resigned as CEO stating he was angry that Barclays was singled out. He is to be replaced by exiting chairman Markus Agius.
Bob Diamond faces tough questions from MPs on Wednesday to answer questions regarding LIBOR fixing.
There is evidence to suggest that the BoE colluded in the LIBOR fiddling. These include phone calls between Bob Diamond and Mervyn King’s deputy Paul Tucker.
Shares in the bank fell 15% in week when the scandal emerged but news of the CEO and Chairman’s resignation have provided a rebound.
The board at Barclays has agreed to launch an audit into its business practices.
The FSA is now investigating other lenders such as RBS.
Other banks have agreed to pay compensation to customers who were mis-sold interest-rate hedged products.
RBS has sacked 10 traders in their alleged involvement in the rate fixing scandal.
Scandal could leave British banks exposed to multi billion pound civil lawsuits, with some raising prospects of a “BP Style” mass litigation against Barclays and other banks.
Lawsuits in the US have already begun, US broker Charles Schwab has filed against a number of banks including Barclays, HSBC, RBS and Lloyds

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

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Barclays LIBOR Scandal

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