Barclays hit with £59.5 million fine - Banking - News - Moneyfacts


Barclays hit with £59.5 million fine

Barclays hit with £59.5 million fine

Category: Banking

Updated: 27/06/2012
First Published: 27/06/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Barclays has been hit with the largest fine ever handed out by the Financial Services Authority (FSA) for serious misconduct.

An investigation by the watchdog found that the bank had manipulated interest rates used to determine the price of bank-to-bank lending.

As a result, the FSA has told the bank it must pay a fine of £59.5 million – the largest ever handed down by the regulator.

The bank has also agreed to pay $200 million to the US Commodity Futures Trading Commission and $160 million to the US Department of Justice as part of the investigation into interest rate manipulation between banks.

The misconduct included making submissions which formed LIBOR and EURIBOR that took into account requests from Barclays' interest rate derivative traders.

"These traders were motivated by profit and sought to benefit Barclays' trading positions," said the FSA.

The bank also sought to influence the EURIBOR submissions of other banks contributing to the rate setting process.

LIBOR and EURIBOR are significant in determining interest rates.

Barclays chief executive Bob Diamond said that the bank had fallen well short of the standards to which it aspires, and has pledged to forgo any bonus this year.

"Barclays' misconduct was serious, widespread and extended over a number of years," said Tracey McDermott, acting director of enforcement and financial crime at the FSA.

"The integrity of benchmark reference rates such as LIBOR and EURIBOR is of fundamental importance to both UK and international financial markets. Firms making submissions must not use those submissions as tools to promote their own interests.

"Making submissions to try to benefit trading positions is wholly unacceptable. This was possible because Barclays failed to ensure it had proper controls in place.

"Barclays' behaviour threatened the integrity of the rates with the risk of serious harm to other market participants."

The FSA said that Barclays co-operated fully with the investigation and, as a result, was given a 30% discount. Without the discount the fine would have been £85 million.

Find the best bank account for you - compare bank accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

More people are switching current accounts

Competition in the current account market remains intense, which means if you’re not happy with your account for any reason, now’s a great time to switch! Happily, more and more people seem to be getting in on the switching action...

Financial services complaints continue to fall

Many people feel dissatisfied with their financial providers at times, but happily, it looks as though the most serious complaints are becoming less and less common.

Contactless spending hits yet another record

Contactless spending is going from strength to strength, hitting new records on a seemingly monthly basis - and it’s just broken yet another one, with monthly contactless spending having passed the £2bn mark for the first time.