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

News

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

MONEYFACTS ARCHIVE
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 It is now over 6 months old so the content may be out of date.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

Simple measures to improve banking security

The payments industry is gearing up for some big changes in the near-future, with the announcement of some key improvements that should help all of us be more secure when banking online.

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!
 
Close