BBA shocked at Financial Services Authority LIBOR findings

The British Bankers' Association (BBA) has announced their shock at reports and on-going investigations into LIBOR fixing. A statement on their website says: “The current LIBOR review, with which our authorities are fully engaged, has been underway since March this year and is considering all aspects including the setting process. “As part of this review we will now be asking the authorities to consider in what manner the LIBOR setting mechanism should be regulated in the future.” The Financial Services Authority (FSA) has issued Barclays with a fine of £59.5m and this takes the total fine up to £290m, including US penalties. Chancellor George Osborne has said that HSBC and Royal Bank of Scotland (RBS) are also being investigated for LIBOR irregularities.  A report in The Times today says that RBS are going to be fined £150 million for “more isolated and less serious” market manipulation. George Osborne also told the House of Commons that fines generated by the FSA may go to the Treasury in future, rather than being used to reduce the regulators levy on financial services firms. Anthony Hilton, of the Evening Standard, wrote an interesting article about LIBOR and how it is set. He explains that at 11am every day, a panel of 16 lenders submit a list of rates that they would lend to other banks to Reuters in London. The top four and the lowest four are rejected - and the average of the remaining 8 rates is then used. To read the story click on the link: http://tinyurl.com/7zhdb7l June 29, 2012