Uh-oh. In case you haven’t been paying attention, there’s a rolling sh*tstorm breaking out across the pond related to the admitted gaming of LIBOR by big investment banks like Barclays. You know LIBOR, right? The rate referenced in practically every major financial contract since 1985.
I wonder how much of that $450 million will go to folks who got the short end of the stick on contracts paid out under a fradulently low LIBOR rate.
From Mark Scott at the NY Times:
LONDON – Barclays is quickly trying to stem the fallout from a rate-manipulation scandal, as its chief executive Robert E. Diamond Jr. [at right] abruptly resigned on Tuesday.
Less than a week ago, the big bank agreed to pay $450 million to settle accusations that it had tried to influence key interest rates for its own benefit, sparking a political firestorm in Britain.
Now, the scandal has claimed three casualties, including Mr. Diamond, Marcus Agius, the chairman of Barclays, and Jerry del Missier, who was promoted to Barclays’ chief operating officer last month.
The resignations come as regulators in London and Washington broadly investigate whether big banks manipulated interest rates to their own advantage, aiming to increase profits and fend off questions about their health. Such benchmarks, including the London interbank offered rate, are essential to setting the lending rates for corporations and consumers. In the Barclays case, regulators accused the bank of lowering its Libor submissions to deflect concerns about its high borrowing costs…
Continued at the New York Times