Barclays Bank is first to take hit over interest rate-riggingJuly 2012
Barclays Bank has been fined a record £287m ($451m, €356m) by UK and US regulators for trying to manipulate London and Euro inter-bank lending rates.
The fine was the result of a settlement between the bank, the UK’s Financial Services Authority and, in the US, the Commodity Futures Trading Commission and the Justice Department over attempts to influence the benchmark London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor) between 2005 and 2009.
The Justice Department is still investigating the role of 20 other international banks in the scandal and further fines are expected.
It is claimed that traders colluded to rig the rates, which are central to determining the cost of borrowing for consumers and companies, to hide the true cost of lending during the financial crisis in 2008.
Barclays chief executive Robert Diamond said: “These activities fell well short of the standards to which Barclays aspires in the conduct of its business.” Barclays shares plunged 15% as the news of the settlement broke amid speculation that banks guilty of rate rigging could face criminal charges and billions of pounds in lawsuits.
UK politicians, including prime minister David Cameron, claimed Diamond’s position was untenable and that he should resign.
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