Barclays was today fined a record £290 million for manipulating the key London-based interest rate on which millions of loans are based each day.
The bank is the first of many which could be fined in a probe which has stretched across continents and involved many regulators.
Barclays today apologised profusely and said its chief executive Bob Diamond, finance director Chris Lucas, chief operating officer Jerry del Missier and head of its investment bank Rich Ricci will receive no annual bonus this year. Last year their received tens of millions of pounds collectively.
Diamond said: “Nothing is more important to me than having a strong culture at Barclays: I am sorry some people acted in a manner not consistent with our culture and values.”
Chairman Marcus Agius, who earlier this year defended Diamond’s £17 million pay package for 2011 at an angry shareholders’ meeting, said he was pleased the top four executives had recognised “their collective responsibility as leaders of Barclays”.
The bank has been fined £59.5 million by the FSA. In the United States it has been fined $200 million by the Commodity Futures Trading Commission and agreed a $160 million settlement with the Department of Justice where it admitted misconduct to avoid further prosecution.
The commission said Barclays had manipulated the London Interbank Offered Rate — a $350 trillion market where the banks agree the rate at which they lend to each other — on “numerous occasions and sometimes on a daily basis over four years starting in 2005.”
Barclays conspired with other banks to rig the market “as a result of instructions from Barclays senior management” the regulator said. Emails uncovered by the regulators included a Barclays trader saying: “We have another big fixing tomorrow and with the market move I was hoping we could set [certain] Libors as high as possible.”
The replies from the Barclays officials who submitted the bank’s overnight rate to the British Bankers’ Association which officially published Libor included emailed responses such as “always happy to help”, “for you, anything” and “Done… for you big boy”.
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The FSA said that the traders had fixed the overnight rates partly out of greed and to try to boost profits but they also cut “Libor submissions during the financial crisis as a result of [Barclays] senior management’s concerns over negative media comment”.
