Liar LIBOR

The Champagne-fuelled, bloated bubble of those years has long since burst, but the long and bitter hangover continues and has lurched into another phase. Public and political anger have been enflamed by publication of Barclays’ final notice from the FSA for LIBOR and EURIBOR manipulation, which was facilitated by a severe lack of systems and controls around submission of data contributing to these rates. Banks hardly needed another scandal on their hands but those that were allegedly involved in interest rate rigging now face a Parliamentary inquiry, possible criminal charges from the Serious Fraud Office as well as pressure to claw back bonuses. Alexandra Carn reports on the compliance context and potential legal actions.

Alexandra Carn (alexandra.carn@edwincoe.com) is a partner at Edwin Coe where she advises on employment law matters, including those related to financial regulation.

Regulatory investigations have been and are ongoing in the United States, Canada, Japan and London in respect of alleged manipulation of the BBAlibor rate. Domestically, this has come home to roost with the record fine of Barclays of £290 million. It is a scandal from which the casualties are only just beginning to emerge and, whatever the end result, it has substantial ramifications for compliance operations in this area going forward.