Libor probe engulfs bank traders [RT]
July 26, 2012 Leave a comment
US and UK regulators are investigating several groups of traders around the world for allegedly teaming up to rig interest rates.
More than a dozen traders from at least nine banks are under investigation, the Wall Street journal writes, citing people close to the probe.
From 2005 to 2011, they allegedly profited by manipulating Libor and other key interest rates. The practice spread as some of the traders moved to other banks and took the conspiracy with them.
The interest rates are used as global benchmarks in determining rates on many types of consumer and business loans.
The emerging details suggest there’s been a widespread conspiracy that continued for several years. As a result, the banks where the traders worked are under growing pressure to explain what they knew.
The suspected rate-rigging comes on top of allegations that some banks made artificially low submissions for setting Libor during the financial crisis.
Britain’s Barclays, where traders were allegedly promised bottles of Bollinger as rewards for rate fixing, already paid about $450 million. The bank admitted some traders and executives tried to fix the London interbank offered rate, or Libor, and other interest rates.
The widening interest-rate scandal cost Barclays Chief Executive Bob Diamond his job and sparked a political firestorm in the U.K. and US.
On Monday, a top House Republican prodded the Federal Reserve Bank of New York for more documents about its response to “admissions of market manipulation” by banks that helped set rates.