Bar­clays pays US$100m in in­ter­est rate fraud set­tle­ment

The Myanmar Times - - International Business -

BRI­TAIN’S Bar­clays Bank PLC has reached a US$100 mil­lion set­tle­ment with 44 US states and the Dis­trict of Columbia over in­ter­est rate ma­nip­u­la­tion in the fi­nan­cial cri­sis era.

The set­tle­ment, an­nounced by New York At­tor­ney Gen­eral Eric Sch­nei­der­man on Au­gust 8, ac­cuses the bank of ma­nip­u­lat­ing bench­mark in­ter­est rates, in­clud­ing the Lon­don In­ter­bank Of­fered Rate (Li­bor), to hide fi­nan­cial prob­lems and ben­e­fit traders’ po­si­tions.

“As a re­sult of Bar­clays’ mis­con­duct, gov­ern­ment en­ti­ties and not­for-prof­its were de­frauded of funds that oth­er­wise could have been used to ben­e­fit the peo­ple of New York,” Mr Sch­nei­der­man said in a state­ment.

Bri­tish and US au­thor­i­ties have since 2012 taken ac­tion against a se­ries of banks, in­clud­ing Bar­clays, UBS and Deutsche Bank, over al­leged rate ma­nip­u­la­tion.

Bar­clays in 2012 pleaded guilty to rate ma­nip­u­la­tion and agreed to pay $453 mil­lion to Bri­tish and US au­thor­i­ties.

The set­tle­ment is the first with US states by a bank on the panel that sets the US dol­lar Li­bor rates, the state­ment said, adding that in­ves­ti­ga­tions were on­go­ing.

As part of a 16-mem­ber panel of banks mak­ing sub­mis­sions to help set daily Li­bor rates, Bar­clays ma­nip­u­lated sub­mis­sions be­tween 2005 and 2009 to avoid the ap­pear­ance that it paid more than its com­peti­tors to bor­row or to fa­vor traders’ po­si­tions, ac­cord­ing to Mr Sch­nei­der­man’s of­fice.

Bar­clays did not re­ceive a fi­nan­cial bailout dur­ing the fi­nan­cial cri­sis but did take ad­van­tage of so-called “dis­count win­dow” lend­ing by the US Fed­eral Re­serve. In a state­ment, Bar­clays said it was pleased to put state Li­bor in­ves­ti­ga­tions be­hind it.

Most of the set­tle­ment will be used to com­pen­sate other or­gan­i­sa­tions hold­ing in­vest­ment con­tracts with Bar­clays who may have been vic­timised. The rest will cover the costs of the in­ves­ti­ga­tion and ad­min­is­tra­tion. The in­ves­ti­ga­tion was led by the at­tor­neys gen­eral of­fices in New York and Con­necti­cut.

Bar­clays last month posted firsthalf net prof­its of £1.1 bil­lion ($1.45 bil­lion), down 31 per­cent over the same pe­riod last year. –

Photo: EPA

Bri­tish fi­nan­cial gi­ant Bar­clays Bank has reached a US$100 mil­lion set­tle­ment with 44 US states and the Dis­trict of Columbia over in­ter­est rate ma­nip­u­la­tion in the fi­nan­cial cri­sis era.

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