libor

Parliamentary Commission on Banking Standards Appointed

Posted on

On July 18, Parliament published a press release announcing that a parliamentary commission on banking standards has been appointed. Press Release.

The commission will consider and report on:

  • Professional standards and culture of the UK banking sector, taking account of regulatory and competition investigations into the London Interbank Offered Rate (LIBOR) rate-setting process.
  • Lessons to be learned about corporate governance, transparency and conflicts of interest, and their implications for regulation and for government policy.

The commission has been asked to report on legislative action no later than December 18 (before the Banking Reform Bill is published) and on other matters as soon as possible afterwards.

SFO Press Release on Manipulation of LIBOR

Posted on

On July 2, the Serious Fraud Office (SFO) published a press release regarding the manipulation of the setting of the London Interbank Offered Rate (LIBOR). Press release.

In the press release, the SFO stated that it had been working closely with the FSA and now that the FSA has concluded its investigation into the regulatory misbehaviour, the SFO is considering whether it is both appropriate and possible to bring criminal prosecutions.

The SFO hopes to come to a conclusion regarding possible criminal prosecutions within a month. It is also working with the relevant authorities that are carrying out equivalent investigations in other jurisdictions.

On July 2, a statement made by George Osborne, Chancellor of the Exchequer on LIBOR and related reforms concerning the banking sector was also published. This included an initiative to establish a joint committee to conduct an inquiry into professional standards in the banking industry. Statement.

FSA Fines Barclays £59.5 Million for Manipulation of LIBOR

Posted on

On 27 June 2012, the FSA published the final notice issued to Barclays Bank plc, detailing a £59.5 million fine for misconduct relating to its submission of rates that formed part of the London Interbank Offered Rate (“LIBOR”) and the Euro Interbank Offered Rate (“EURIBOR”). This is the largest ever fine that the FSA has imposed. Final Notice.

In particular, Barclays breached the following Principles:

  • Principle 5 (market conduct) – Barclays was found to have breach Principle 5 by making US dollar LIBOR and EURIBOR submissions that took into account requests made by interest rate derivatives traders.
  • Principle 3 (management and control) – Barclays did not have adequate risk management systems or effective controls in place relating to its LIBOR and EURIBOR submission process.
  • Principle 2 (skill, care and diligence) – Barclays failed to conduct its business with due skill, care and diligence when considering issues raised internally relating to its LIBOR submissions.

In addition to the fine by the FSA, the U.S. Commodity Futures Trading Commission fined Barclays $200 million, and Barclays agreed to pay a penalty of $160 million as part of an agreement with the U.S. Department of Justice.

The Barclays settlement is the first settlement announced in connection with the LIBOR probe, with regulators investigating more than 20 banks.