Treasury select committee chairman Andrew Tyrie says attempts by Barclays to manipulate the rate at which banks lend to each other is “inexcusable”.
Earlier today, it was announced Barclays has been fined £290m by the FSA, the US Commodity Futures Trading Commission and the US Department of Justice for misconduct relating to the London Interbank Offered Rate and the Euro Interbank Offered Rate. This is the largest fine ever imposed by the FSA.
Tyrie says: “This was a serious breach. I am very concerned about it. The price setting mechanism of Libor is crucial to the integrity of the markets. This appears to have been put at risk. From the information I have, it looks inexcusable.”
The regulator says Barclays’ breaches involved a significant number of employees and occurred over a number of years.
Barclays’ misconduct included making submissions which formed part of the Libor and Euribor setting process that took into account requests from Barclays’ interest rate derivatives traders. The FSA says Barclays’ traders were motivated by profit and sought to benefit the bank’s trading positions.