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FCA fines Lloyds £105m over Libor and benchmark rigging

Lloyds Banking Group has been fined £105m by the FCA for trying to manipulate Libor and the amount it had to pay to the Bank of England to access the Special Liquidity Scheme.

The FCA says it is the joint third highest fine imposed by itself or the FSA. The fines relate to failings by Lloyds Bank and Bank of Scotland, both part of Lloyds Banking Group.

Overall Lloyds has been fined a total of £218m, including a £62m penalty to the US Commodity Futures Trading Commission and £51m to the US Department of Justice. 

Lloyds has also paid the Bank of England £7.76m in compensation for the reduction in SLS fees received by the Bank as a result of Lloyds’ failings.

The regulator says £70m of the fine relates to attempts to manipulate the fees payable to the Bank of England for the firms’ participation in the SLS, set up to support struggling banks during the financial crisis.

The £35m which relates to Libor is the seventh fine handed out over rigging the interbank lending rate. The FCA says while the bank’s Libor-related misconduct is similar to that by other banks, manipulation of the repo rate has not been seen before.

FCA director of enforcement and financial crime Tracey McDermott says: “The firms were a significant beneficiary of financial assistance from the Bank of England through the SLS. Colluding to benefit the firms at the expense, ultimately, of the UK taxpayer was unacceptable. This falls well short of the standards the FCA and the market is entitled to expect from regulated firms.”

Treasury select committee chair Andrew Tyrie, who also chaired the Parliamentary Commission on Banking Standards says individuals must be held responsible for this “appalling behaviour”.

He says: ”One of the central recommendations of the Commission was to ensure that individuals carry responsibility for their decisions and behaviour, and that they will be held accountable when they rig markets. This settlement is part of the much needed clean-up operation. Implementing the Commission’s proposals will be another.”

Lloyds Banking Group chief executive Antonio Horta-Osorio says: “The behaviours identified by these investigations are absolutely unacceptable. We take the findings of these investigations, which relate to issues from some years ago, extremely seriously.

“Together, the board and the group’s management team have taken vigorous action over the last three years to prevent this kind of behaviour, through closing or reducing our legacy investment banking activities.”

In a statement, the Bank of England says: “The Bank put the SLS in place to help banks get through the worst of the financial crisis. The fact that Lloyds and Bank of Scotland, the largest beneficiaries of this assistance, manipulated their three month GBP repo rate submissions in order to reduce fees is highly reprehensible and clearly unlawful.

“Not only were fees payable by Lloyds and Bank of Scotland reduced as a result of this conduct, so too were fees payable by other firms using the SLS.  The compensation payment takes this fully into account.” 


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Who cares !!!

    Another day another fine blah blah blah blah !!!

    Still must get back to work, I have some extra levies to pay for !!!

  2. Incompetent Regulators 28th July 2014 at 2:32 pm

    Doesn’t the Bank of England MPC and the ECB do the same thing, manipulate rates?

  3. Grant Mitchell 28th July 2014 at 2:36 pm

    In the dictionary under bent, unscrupulous, corrupt, thieving,dishonest and morally bankrupt it simply says “see Lloyds BG” I think its fair to say if you are a Lloyds customer be prepared to be shafted in order to pay for their indiscretions.again!, and be prepared for the next one …… know there will be one, its just a matter of uncovering it.

  4. Grant Mitchell 28th July 2014 at 3:22 pm

    The B of E may well manipulate rates but when they do so for their own profit and greed having continually and wilfully committed financial wrong doing I’ll start to worry.

  5. thruthelthrolth 28th July 2014 at 3:25 pm

    and still no one goes to prison.

  6. rig a dozen mortgages, rightly go to prison

    rig the entire market…get a fine

  7. No one will ever convince me that with all these investigations proving that there was “rigging” going on around the world that these agencies cannot find out the actual culprits. It is despicable that these people have not been prosecuted to date.

  8. Grant Mitchell 28th July 2014 at 4:43 pm

    The culprits have in all probability been identified and in grand banking custom they will have been promoted further up the ladder of incompetence or given a government quango for the next 5 years, this could be for staying quiet on who actually gave the go ahead to undertake these practices. As ever it will remain under wraps neatly buried in the hope it quietly goes away…..until the next time.

  9. Julian Stevens 28th July 2014 at 4:54 pm

    I suppose, Marty, that the FCA will say that the purpose of these attestations it now requires from senior managers will enable it to know exactly who shall be tarred and feathered when wrongdoings are unciovered.

    Of course, in a just world, senior managers at the FCA would, as well, be required to sign attestations, the first victim of which would be Clive Oh no I’ve caused another train wreck Adamson. But that’ll never happen. Some animals are more equal than others.

  10. @ Marty

    The FCA waste millions (of our cash) on lawyers and legal cases, Clifford Chance is going to cost us circa 10 million for Adamson’s balls up, (bet he still gets his bonus !)
    The government gets all the fine money, can you imagine the extra cost to bring individuals to book ? all paid for out of our clients money !!!

    So in a perverse way I am glad they don’t go after the individuals; we pay for enough, and these attestations are not worth the paper they are written on, it was not that long ago the FCA was moaning that every time they walk into a building, the companies first reaction is to call their lawyers (and do you blame them) the thing is the FCA are (I think) genuinely surprised that people don’t welcome them, drop their trousers and wait to get ? well you know the rest !!

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