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‘I’m like a whore’s drawers’: What RBS traders said over Libor

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Following Royal Bank of Scotland’s £390m fine for Libor manipulation today, the FSA and US regulators have published a string of emails and electronic conversations between RBS employees which show the extent of the misconduct.

Libor is the most frequently used global benchmark for interest rates, and requires banks to make judgments about the rate at which it can borrow funds and contribute rate submissions every business day.

Libor is published for 10 currencies, but Japanese yen and US dollar Libor are widely used currencies, with three-month and six-month among the commonly used maturities.

RBS’ Libor submissions determined the cost of transactions for its money market books. Strategies to profit from manipulating Libor included lending money at a high six-month Libor rate and borrowing it at a lower Libor rate in order to make a profit.

Examples of RBS misconduct:

August 2007: RBS yen traders’ discussion about how they were aware other banks, including UBS, were manipulating Libor

Senior Yen Trader: this libor setting is getting nutss

[…]

Bank A Trader: im puzzled as to why 3m libor fixing not coming off after the FED action

[…]

Bank B Trader: [UBS] is lending dolls through my currencies in 3 month do u see him doing the same in urs

[…]

Senior Yen Trader: yes[,] he always led usd in my mkt[,] the jpy libor is a cartel now

[…]

Senior Yen Trader: its just amazing how libor fixing can make you that much money

[…]

Senior Yen Trader: its a cartel now in london[.]

September 2009: An RBS primary submitter agrees to change the direction of Libor submissions

September 14:

Yen Trader 1: high 3s and 6s please

Primary Submitter: ok

September 15:

Yen Trader 1: can we lower our fixings today please [Primary Submitter]

Primary Submitter: make your mind up[,] haha , yes no probs

Yen Trader 1: im like a whores drawers

May 2009: Bloomberg chats reflecting attempts to manipulate Swiss Franc Libor

Swiss Franc Trader: [Primary Submitter] pls can we get super high 3m[,] super low 6m

Swiss Franc Trader: PRETTY PLEASE!

Primary Submitter: 41 & 51

Swiss Franc Trader: if u did that[,] i would lvoe [sic] u forever

Primary Submitter: 41 & 55 then …

Swiss Franc Trader: if u did that i would come over there and make love to you[,] your choice

Primary Submitter: 41+51 it is

Swiss Franc Trader: thouht [sic] so

Primary Submitter: so shallow

November 2010: Conversation where primary submitter pretends to refuse to move Libor over Bloomberg chat, then agrees via telephone

Bloomberg Chat:

Senior Yen Trader: was wondering if it suits you guys on hiking up 1bp on the 6mth Libor in JPY … it will help our position tremendously

Primary Submitter: how you doing with all the volatilities these days? … to be honest happy with levels we see at the moment

Senior Yen Trader: ok no prob … wouldn’t want to cause any problem … thanks mate

Telephone Conversation:

Senior Yen Trader: Hello?

Primary Submitter: Morning, [Senior Yen Trader]? Hi, [Primary Submitter].

Senior Yen Trader: Yeah, how are you?

Primary Submitter: I’m pretty good sir. Very Good. We’re just not, we’re not allowed to have those conversations on [instant messages].

Senior Yen Trader: Oh, sorry about that. I didn’t know.

Primary Submitter: (laughter)

Senior Yen Trader: (laughter) Oh because of the, the BBA thing?

Primary Submitter: Yes, exactly.

Senior Yen Trader: Ah, ok ok.

Primary Submitter: So yeah, leave it with me, and uh, it won’t be a problem.

Senior Yen Trader: Ok, great.

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Comments

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

  1. 1. Not even remotely professional conduct from these traders.

    2. Show me a market that is not rigged in some way.

    PS. Mad Max (Keiser) will have a field day with these revelations.

  2. Clear evidence of knowingly and deliberately setting to defraud. The names must be known, although redacted in this report, so where are the criminal prosecutions? Where are the life time bans from Financial Services? Where are the clawbacks from past bonuses? Where is the naming and shaming for the individuals concerned and for their Managers who allowed this to happen?

    No, fine the banks which mean fining the shareholders who trusted the bankers to do their jobs properly and legally. As if the shareholders had not already suffered from low share values, little or no dividends, in addition to suffering the effects of the almost economic meltdown that affected everyone. Everyone except the Bankers that is who had large bonuses to shelter behind.

  3. “Too difficult to identify the individuals” Perhaps the FSA lady should just look, and subpoena this little list?
    Fit for purpose……….my a**e!

  4. How is it even possible to respect the professionalism or integrity when people show such a blatant disregard for honesty, and the level of communication is juvenile at best, says something of standards in business, this discredits their whole industry

  5. Wetting pants anyone? NatWest 3 were extradited using terrorist legislation how many years ago? And did a lot less damage. People were warned when that happened and pretty much deserve what I hope is combing although it does go against what the terror legislation was supposed to be for.

  6. And these are those ‘professionals’ that banks justify paying high salaries and bonuses to.

  7. Time to put your ya yas away and get on with your job.

  8. I agree that criminal prosecutions should be brought against all concerned, and that if the will was there then the FSA could easily identify these morons. However, I fail to shed a tear for the shareholders. They were perfectly happy to reap high dividends when the banks were recklessly lending to the public during the mortgage boom. I don’t see shareholders handing back those dividends?!

  9. I thought the tax payer has already bailed out the bank so the fines should be paid back to the taxpayer and not to the Treasury. Or is that too obvious?

  10. Oh Dear. Judging from the comments above, there is clearly a lack of understanding as to how the City actually works. Lucky the remuneration details for these folks haven’t been published, there would be heart attacks all round.

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