UK crisis: Barclays staff denied anonymity over Libor fraud scandal

bob-diamond.jpg
Former Barclays chief Bob Diamond resigned after the Libor fraud
scandal erupted last year

Scottish News: UK crisis - Barclays staff denied anonymity over Libor fraud scandal

Over 100 Barclays staff who have been accused of rigging the Libor (London Interbank Offered Rate) have failed in a bid to keep their names secret during a preliminary court hearing focusing on manipulation of the internationally used interest rate benchmark.

Bosses at more than a dozen companies which manage care homes are attempting to sue the bank for losses incurred when bank employees sold them financial products without informing them that the rate they were based on had been subject to manipulation.

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Judge Mr Justice Flaux told the court: “That there was manipulation of Libor is clear because that is what the regulator has found and there has been a whopping great fine…. The issue is how far up the chain did this go."

Barclays lawyers argued that revealing the names of individuals could be unfair:

“The fact that someone is named in hundreds of thousands of pages of documents following a wide-ranging three-year investigation in which no stone was left unturned does not necessarily mean that that person was involved in any wrongdoing.”

Both current and former Barclays bankers and employees attempted to keep their identities hidden after playing alleged roles in the scandal, which has already cost the British taxpayer and consumers millions.

Last week, the Royal Bank of Scotland was forced to pay around £500 million in fines for the actions of traders in relation to Libor rigging. The fines will hit the entire population as the bank is 82 percent owned by the taxpayer.

The UK taxpayer will pay American watchdogs around four-fifths of the amount whilst the Financial Services Authority will fund the £100 million remainder, which will eventually be returned to the government.

Hearings for Barclays’ employees come after the high-street bank was fined £290 million last July for Libor manipulation, an event which saw the resignation of then-CEO Bob Diamond.

There is widespread criticism at the size of the fines which although sound large are miniscule compared to the size of the market being manipulated which is valued at hundreds of trillions of pounds.

The fine for Barclays is also small compared to the amount UBS, Switzerland’s largest bank was fined for its role in the scandal – some 1.4 billion Swiss francs (around $1 billion).

Regulators across the globe continue to investigate the rigging which has been as widespread as it is clandestine. The scandal has fundamentally harmed London’s brand as a global financial centre.

Co-Chief Executive Officer of Germany’s Deutsche Bank Anshu Jain, yesterday said “The Libor affair sickens us all,”

In the midst of a panel discussion in Koenigstein, the head of the bank, which has also set aside funds for potential fines for Libor involvement said: “I don’t think any CEO thought this was a possibility. It sickens me the most of all the scandals.”

According to Bloomberg, he declined to comment officially.

As an on going investigation, the extent of Libor manipulation and the resulting fines to institutions and in-turn the taxpayer, is open-ended.

The Libor scandal was one of the greatest vices to the UK economy last year after news of the scandal followed public anger about hefty bonuses awarded to banking chiefs in the midst of austerity as a result of the 2008/2009 financial collapse.

In September, a report by the FSA which revealed 22 UK financial firms to be mis-selling products and services to customers that they either did not need or could not use, which managing director at the FSA Martin Wheatley said was due to “poorly designed incentive schemes”.

Following on the on going Libor scandal, London is already preparing to lose its status as a global financial capital, with rival cities such as Ney York and Hong Kong set to overtake.

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published this page in News 2013-01-22 18:19:28 +0000