LONDON - British authorities must find out which executives at Barclays knew about its attempts to manipulate key market interest rates, British finance minister George Osborne said on Thursday (28/06/2012), warning that criminal proceedings could follow.
Libor stands for the London Inter-Bank Offered Rate, according to The Daily Telegraph, and is the average cost of borrowing for banks, calculated daily. That average is taken as official Libor, which is used to price trillions of pounds of loans and financial products across the world.
The rate is worked out by asking banks to submit their borrowing costs, discarding the top four and bottom four rates, and taking the average of the rest. There are, in fact, several Libor rates measuring the cost of borrowing for different lengths of time, of which three-month Libor is seen as the benchmark. Libor is also calculated for different currencies.
"As far as the chief executive of Barclays is concerned, he has some very serious questions to answer today. What did he know and when did he know it? Who in the Barclays management was involved, and who therefore should pay the price?” Osborne told parliament.
"Barclays are not alone in this, the FSA is continuing to investigate the conduct in a number of institutions.”
Barclays, whose shares were trading down more than 11 percent, was fined 290 million pounds by U.S. and British authorities on Wednesday (27/06/2012) after investigations found the bank tried to manipulate key market interest rates.
(Reporting by Matt Falloon and Tim Castle Editing by Maria Golovnina) - Reuters