UK banks RBS and Lloyds among 12 in Libor probe

RBS and Lloyds, the two UK tax-payer backed banks, are among a dozen financial groups being investigated for manipulating the Libor rate, which resulted in a record £290m regulator fine for Barclays.

HSBC, Citigroup, JP Morgan, Deutsche Bank, UBS and the inter-dealer broker ICAP are also reported to be under investigation by regulators across the world.

UBS has already secured partial immunity in exchange for co-operation, UK newspaper The Telegraph reported, and Lloyds has already suspended two derivatives traders as part of the investigation.

Yesterday, Barclays was hit with a £60m fine from UK regulator the FSA and a £230m fine from US regulator the Securities and Exchange Commission, as traders were found to have manipulated the inter-bank lending rates Libor and Euribor.

Barclays, and the other banks, still face fines from other jurisdictions as Japanese, Swiss, Asian and Canadian regulators are also investigating.

The Libor investigation began in 2008 as suspicion mounted that the banks were “low-balling” the cost of borrowing as the financial crisis hit. However, it has since been discovered the rates may have been manipulated as far back as 2005.

Barclays yesterday said it “fell well short of standards” and chief executive Bob Diamond and three other senior executives gave up their bonuses for the year.

 

This article was first published on Investment Week

 

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