Barclays Bank Fined Millions In Market Manipulation Case
Here's a new item on the list of banks that behave badly. Yesterday, British and U.S. authorities fined Barclays bank $452 million dollars for trying to manipulate two key interest rates: the British Libor and the Euribor, similar to the U.S. prime interest rate.
Both are used to set other rates for loans and mortgages, even derivatives, according to the Telegraph.
The U.S. Commodity Futures Trading Commission says Barclays tried to influence the interest rates as early as 2005, before the world financial crisis broke. Barclays employees urged other banks to participate in the attempted manipulation. And the CFTC says senior Barclays managers made false reports to protect the image of the bank during the financial crisis.
Why the deceit? Money, of course. Tracey McDermott, a member of the British financial regulatory agency, told the Telegraph that by influencing the Libor, Barclays traders improved the value of the bank's own derivative investments.
CFTC says Barclays cooperated with this investigation, but it's not over - CBS reports Barclays is helping the Justice Department in a related criminal investigation.
There are calls for Barclays' CEO, Robert Diamond, to resign. And AP reports that British Treasury head George Osborne says four more big banks are being investigated on suspicion of market manipulation. They include Citigroup, UBS of Switzerland, Royal Bank of Scotland and HSBC of Britain.