Subject category:
Finance, Accounting and Control
Published by:
Wits Business School - University of the Witwatersrand
Abstract
In late June 2012, the results of a long-term investigation by the United Kingdom’s (UK) financial watchdog, Financial Services Authorities (FSA), revealed that derivatives traders and bankers at Barclays bank had been colluding to influence submissions that influenced the London Interbank Offered Rate (LIBOR) and the European Interbank Offered Rate (EURIBOR). The investigation also showed that Barclays’ employees had colluded with colleagues at other major banks to influence their LIBOR and EURIBOR submissions, and consequently reduce the rate at which the two had been set. This had allowed the banks to make greater profits on trades, especially in the United States (US) derivatives market, which often relied on LIBOR as a reference rate for financial products. The scandal led to the resignation of the Barclays chief executive officer (CEO), Bob Diamond, and a number of the Barclay’s senior executives, as well as the imposition of a hefty fine on the bank.
About
Abstract
In late June 2012, the results of a long-term investigation by the United Kingdom’s (UK) financial watchdog, Financial Services Authorities (FSA), revealed that derivatives traders and bankers at Barclays bank had been colluding to influence submissions that influenced the London Interbank Offered Rate (LIBOR) and the European Interbank Offered Rate (EURIBOR). The investigation also showed that Barclays’ employees had colluded with colleagues at other major banks to influence their LIBOR and EURIBOR submissions, and consequently reduce the rate at which the two had been set. This had allowed the banks to make greater profits on trades, especially in the United States (US) derivatives market, which often relied on LIBOR as a reference rate for financial products. The scandal led to the resignation of the Barclays chief executive officer (CEO), Bob Diamond, and a number of the Barclay’s senior executives, as well as the imposition of a hefty fine on the bank.