Posts tagged 'Libor'

The value of blowing that whistle

However late you might decide to come clean, it pays to be first to ‘fess up.

Antitrust: Commission fines banks € 1.71 billion for participating in cartels in the interest rate derivatives industry Read more

Who let the regulatory clowns out? (Updated)

This post has been substantially revised in the wake of an internal discussion here at the FT…

———-

Close readers will recall that just earlier this week we were pondering the case of one Richard Usher, formerly chief FX dealer for JP Morgan in London. His mangled remains were found under the proverbial publicity bus that is the official regulatory investigation into the supposed fixing of the daily WM/Reuters forex price fix, which is currently underway on both sides of the Atlantic. It seemed a shame to us that someone had been executed, professionally, for simply being in possession of an alleged Skype chat, therein containing some colourful banter. Especially when no evidence of said Skype chat had yet been presented.

It looked to us like someone, almost certainly in regulatory circles, was trading Usher’s name for political gain.

But now we’re confused. Read more

No more Mr Libor

Derivatives Broker 1:

HI MATE,JUST HAD [Yen Desk Head] BACK ON RE LIBORS,HAD A LOT OF COMPLIANCE PRESSURE RECENTLY DUE TO THE CREDIT PROBLEMS, WE BOTH NEED TO BE A LITTLE MORE SUBTLE IN OUR “VIEWS” .. .IE’ I THINK THE FWDS ARE SUGGESTING THIS 6MOS LIBOR SHOULD BE LOWER …. ETC. MY E-MAILS ETC. NEED TO BE WORDED MORE CAREFULY Read more

Liborising oil-price reporting, encore

Hooray, the final version of the Iosco ‘Principles for Financial Benchmarks’ is out. It’s dull.

At least given the stakes: moving Libor — and a great deal of basic pricing in finance beyond it — towards a basis in actual transactions. Read more

Moneybrokerese

A new word to you? Yes, well, we were searching for a suitable adjective to describe this:

20 June 2013
Tullett Prebon plc

Statement in relation to court proceedings

 Read more

My big fat interbank reference rate

Spotted in this IMF working paper — a bracing proposal for the race to choose one rate, among several out there, to replace discredited old Libor…

Choose all of them: Read more

Some Libor frustration

Barclays views it as imperative that the market has access to Benchmarks that are well constructed, transparent and that inspire the confidence of other market participants and regulators…

You can say that again.

Some (more) Libor reading landed this week — the responses from banks, and other cogs and gears of the market, to a recent report by Iosco about reforming financial benchmarks. Everyone from Thomson Reuters to the European Central Bank, Blackrock to Calpers, has weighed in here. Read more

A wholly unregulated Libor, FSA edition

Yes yes, the FSA had trouble passing the Wall Street Journal around the office in mid-2008.

 Read more

RBS, and “just amazing how libor fixing can make you that much money”

Yeah, so “stupid Libor emails” is now an established sub-genre in banker literature.

Though the funny thing about Wednesday’s RBS revelations is that attempts at manipulation generally, at least at the start, weren’t written down. The whole problem was that people trading rates were sat right next to people in charge of submitting rates for Libor. That’s due to the “Short-Term Markets Desk”, RBS management’s October 2006 bid to “facilitate more communication”. Oops. Read more

The RBS Libor files

Presenting the CFTC order against RBS, as part of the bank’s $325m settlement with the regulator over allegations of “hundreds” of attempts at manipulation of Libor (notably Yen Libor):

 Read more

Waiting on RBS

It’s not exactly surprising that US Libor prosecutors are pushing for criminal charges against one of Royal Bank of Scotland’s subsidiaries.

As we keep hearing, RBS’s level of involvement in the rate-rigging scandal is somewhere between Barclays, which got a nonprosecution agreement and paid $460m in penalties, and UBS, which paid $1.6bn and had to agree to having a Japanese subsidiary plead guilty to criminal charges. Read more

RBS in for another round of bonus awkwardness, with added Libor angle

Soon, it appears, we’ll have another big Libor settlement to write about — this one from RBS. Both the FT and the WSJ are tipping the fines to be in the order of £500m. The FT says it could be more than £400m to the US authorities and about £100m to the FSA; the WSJ doesn’t mention how it might breakdown between the US and UK, but says the settlement “could be completed within the next two weeks”.

Also, yikes! RBS (or specifically, an Asian unit of RBS) might have to plead guilty to some criminal charges if the US prosecutors have their way, says the WSJ.

Shockingly RBS does not like this. But… RBS may not have any choice: Read more

Bob Diamond, John Varley, Jerry del Missier, Chris Lucas, Rich Ricci, and the Honourable Mr Justice Flaux

Quite a victory for open justice on Thursday — senior Barclays bankers involved in the first major test litigation over Libor will be publicly named in court after all, after a High Court judge threw out their application for anonymity.

Full FT story here. (The FT joined other media organisations in challenging the anonymity.) Read more

EuriBORE: oh sorry, does this fat finger belong to you?

The ESMA-EBA published their report on the administration and management of Euribor on Friday. Among the outline of the now familiar shortcomings of such benchmarks were tables demonstrating basic operational failures, e.g. fat finger errors by panel banks… Read more

EuriBORE: the recommendations, the fat fingers, the inconsistencies

ESMA (European Securities and Markets Authority) and the EBA (European Banking Authority) got together to make recommendations to the EEBF (Euribor-European Banking Federation) about Euribor. All the acronyms that start with E were there. It was quite the party, we’re told. Like, the EFSF got sooo drunk and nearly bailed out the Spanish government! The ESM was seriously not amused.

Anyway… Read more

zOMG Deutsche Bank traded rates while also being on Libor panels

The WSJ has news: “Bank Made Huge Bet, and Profit, on Libor“. The bank in question being Deutsche. The huge bet and profit being in 2008 on a bunch of rates trades.

Of course other banks did and do trade rates, in size, but let’s cut straight to the WSJ graphic… Read more

The art of email when big brother is watching

One of the things the Libor scandal has taught us is that there actually is a big contingent of people working in banks who don’t understand that emails, like puppies for Christmas, are forever. Strange, isn’t it?

To emphasize the point, Ernst and Young reported the results of an investigation, co-developed by the FBI, on language that tends to be present in electronic communications when cases of fraud are uncovered. Read more

The three ‘muscateers’, captain ‘caos’ and SUPERMAN Assemble (at UBS)

The competition is on! Sure, UBS is already ahead of Barclays in the FSA fine stakes, but will the inevitable embarrassing communiques beat “done for you, big boy”? Opening gambit from the FSA’s Final Notice to UBS on Wednesday morning (emphasis ours):

For example, on 18 September 2008, a Trader explained to a Broker: “if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today … I will f[**]king do one humongous deal with you …

 Read more

Some colour on UBS’ ‘unquantifiable’ Libor misconduct [updated]

The FSA’s component of the UBS settlement relating to Libor and Euribor was £160m — the largest fine it has ever imposed.

The UK financial regulator made some revealing comments on the Swiss group’s transgressions, which it says “involved a significant number of employees and occurred over a period of years in a number of countries”: Read more

UBS pays up

UBS will pay a total of CHF1.4bn ($1.5bn) — or, more than three Barclays — in fines and profit disgorgements related to Libor and Euribor claims. The payments will go to US, UK and Swiss regulators. The bank has also warned of losses totalling about CHF2 to 2.5bn for the fourth quarter, largely due to the settlements and provisioning, although CHF500m related to its restructuring.

Here is the statementRead more

‘That’ll be two Barclays please’

It might not be made public until Monday but the FT reports a fine above $1bn could be landing on UBS’s doorstep to settle allegations of Libor manipulation. Driven largely, it appears, by CFTC and DoJ penalties.

That’s more than double the Barclays record set in June… Read more

FSA takes baton from Wheatley! Sits down, writes questions, hits publish

Consultation paper from the Financial Services authority, fresh off the printing press on Wednesday morning… Read more

Thank you, Libor

A judgmental structure of supervision that emphasises the big issues has to be matched by proper transparency . . . or it won’t work.” Andrew Bailey, head of prudential regulation at the Financial Services Authority, told that to parliamentarians on Monday.

Too bad there’s seemingly no tradition of transparent supervision in the UK, especially when it comes to banks. Read more

Guest post: Give banks a break on Libor

From Richard Farley, Leveraged Finance partner at lawyers Paul Hastings

Last Friday, Britain’s top financial regulator, Martin Wheatley of the Financial Services Authority, issued his final report with recommendations for the comprehensive reform of the scandal-ridden LIBOR setting process. Read more

Introducing New Libor [Updated]

The massive flaws in the method of setting Libor and similar rates are probably familiar to most FTAV readers by now — as are the challenges of coming up with a better replacement.

The review led by new FSA chief Martin Wheatley set out to either “strengthen Libor” or “find an alternative to Libor”. Read more

“Nice Libor”

Here’s another addition to the canon of Libor-related conversations.

A former RBS employee is suing the bank for wrongful dismissal after the bank fired him last year for allegedly participating in Libor-fixing. Tan Chi Min, the ex-employee in question, was the bank’s Singapore-based head of delta trading for Asia. Read more

Bob’s Barclays appointment and its FSA caveat

The Treasury Committee has let loose some letters between its chairman, MP Andrew Tyrie, and the former chief executive of the FSA Hector Sants. The subject matter of the correspondence concerns the original approval by the FSA of Bob Diamond appointment as CEO of Barclays back in 2010.

The freshly released content (see below) provides confirmation that the FSA caveated its approval of Diamond with a warning that it could change its mind if there was an adverse outcome from the Libor investigation. Read more

Mann speed record for banking report set

John Mann, the battler from Bassetlaw, is back with the results of his very own banking inquiry.

The Labour MP set up the alternate inquiry after expressing his displeasure at the omission of fellow committee member Andrea Leadsom and his good self from the specialist Libor inquiry because they were “too outspoken”. The words “whitewash” and “farce” also made an appearanceRead more

The ‘mystery Libor’ precedent

By now everyone is well aware of the flaws associated with the Libor-setting process. As yet, however, no alternative has been deemed full-proof enough to replace it.

The search for a better system, however, is on. Read more

Barclays and Libor, the MPs’ report

Click to enlarge:

It’s the product of all those Select Committee hearings, including appearances by Messrs. Diamond and Tucker. It is only a preliminary report. But it does not have kind words for the authorities who failed to stop the attempted manipulation of Libor before and during the financial crisis. (Barclays management is of course completely coruscated.) As jaded as we’ve all become by the Libor scandal, it’s pretty damning. Read more