Lloyds added to global Libor-fixing bank probe
Nine more banks, including Lloyds Banking Group, have been issued with subpoenas by US state prosecutors as part of an expanding probe into allegations of attempts to manipulate the Libor rate.
According to the Wall Street Journal, the other banks sent subpoenas by the New York and Connecticut attorney-generals are Bank of America, Bank of Tokyo Mitsubishi UFJ, Credit Suisse, Rabobank, Royal Bank of Canada, Societe Generale, The Norinchukin Bank and West LB.
They twin-headed investigation will see the nine banks join Barclays, Royal Bank of Scotland, HSBC, JP Morgan Chase, UBS, Deutsche Bank and Citigroup, which are already being probed by authorities.
Barclays, which confessed to manipulating Libor, duly coughed up a £290m fine as punishment and witnessed a series of high-level resignations such as chief executive Bob Diamond and chairman, Marcus Agius.
Earlier this month, the government accepted all the recommendations contained in the Wheatley review to overhaul Libor.
It means that the British Banking Association (BBA) will lose its role as LIBOR administrator with former 3i chairman Baroness Hogg heading the taskforce to find an appropriate successor.
The move followed strong criticism of the way the BBA ran Libor, although it argued it was not directly responsible for compiling the rate. While the BBA has published the rate since 1986, it has never been directly regulated, despite the special role it has as a key global benchmark used by banks to lend to companies and individuals.
Financial secretary to the Treasury, Greg Clark, said: ‘The government is determined to restore the credibility of Libor. That is why we have accepted Martin Wheatley’s recommendations in full and will begin the process of implementing them without delay.
‘The government’s changes to legislation will ensure that those that attempt to manipulate Libor face the full force of the law. But this is just one part of the process, the banks and the BBA will have to play their part to ensure that reform is effective and Libor’s reputation is restored.’
Published 26 October 2012
SOURCE: CCH Online