Categories: BankingEurope

Barclays’ Libor Rate Fixing Leads to Resignations

Barclays last week agreed to pay $453 million to settle U.S. and British authorities’ allegations that the British bank tried to fix and manipulate the London interbank offered rate, or Libor, which is the benchmark for interest rates on trillions of dollars of loans to individuals and businesses around the world.

Barclays executives initially believed they could ride out any resulting fallout from the settlement and accompanying admission that Barclays had acted improperly. But by Tuesday, the scandal had prompted the resignations of Mr. Diamond, Barclays Chairman Marcus Agius and Chief Operating Officer Jerry del Missier, some of the British banking industry’s most prominent figures. No individuals were charged.

Libor: What You Need to Know

What it is: Libor – or the London interbank offered rate benchmark – is supposed to measure the interest rates at which banks borrow from each other. It is based on data reported daily by a 16-bank panel. Other interest rate indexes, like the Euribor (Euro interbank offered rate) and the Tibor (Tokyo interbank offered rate), function in a similar way.

Why it’s important: More than $800 trillion in securities and loans are linked to the Libor, including $350 trillion in swaps and $10 trillion in loans, including auto and home loans, according to the CFTC. Even small movements – or inaccuracies – in the Libor affect investment returns and borrowing costs, for individuals, companies and professional investors.

CFI

Recent Posts

The Big Themes from Money20/20: Why Banks Are Back, AI Is a Risk, and Financial Inclusion Finally Matters

By Alessandro Hatami, European banking innovation expert and co-author of Reinventing Banking and Finance and…

18 hours ago

Net Zero: OECD Report Sets the Record Straight on Economic Benefits

For years, a persistent argument has loomed over the push for net zero: that transitioning…

18 hours ago

CORDET Capital: Unlocking the Potential of Northern Europe’s Lower Mid-Market

With a sharp focus on delivering compelling risk-adjusted returns, CORDET Capital has positioned itself as…

5 days ago

Uzbekistan Investment Forum: Economic Momentum Meets Strategic Maturity

Attend enough investment forums and they begin to blend into one another. The Fourth Tashkent…

6 days ago

Tashkent’s Turning Point: Why the Time is Now for Global Investors in Uzbekistan

As Uzbekistan accelerates its transformation from a closed economy to a liberalised investment destination, the…

1 week ago

BIAT: Strengthening Market Leadership Through Innovation, Digitalisation, and Responsible Governance

BIAT continues to assert its dominance in the Tunisian financial market, reinforcing its resilience with…

2 weeks ago