Executive Summary: The Libor Scandal

EXECUTIVE SUMMARY

The Libor scandal has left many financial markets reeling and one called into question the ethics of the banking industry. What does Libor mean? And why are banks in so much trouble for manipulating? The assignment is regarded to what Libor is and what were the victims and how these victims were affected by the Libor scandal. I will also be emphasising how the banks that were part of this rigging affected/ how they influence the Libor rate and they left Libor as a mess. The fines that were charged to the banks or individuals who played and what the fines were for and how much they will be charged.

Libor stands for London Interbank Offered Rate and is a key market benchmark interest rates used in many financial contracts with

Barclays manipulated rates for two reasons, firstly, from early 2005, traders sought particular rate submissions to benefit to their financial positions and the second reason, during the period of 2007-2012 of the global financial crisis, Barclays lowered rate submissions to make their bank seem healthy. The banks that were involved in this scandal were the Citigroup, JPMorgan, and The Royal Bank of Scotland and Deutsche Bank. Whereby the Citigroup received immunity for one of the infringements and was fined €70 million. Deutsche Bank agreed to combine fines of about $2.5 billion for its involvement in the Libor scandal. The major Libor-rigging players were Barclays, UBS and RBS.

Barclays Bank admits misconduct and accepted the responsibility that is incorporated into the agreement. Barclays Bank gave Libor submissions that were falsely because they improperly took into account the trading positions of its own derivative traders. For this illegal, Barclays Bank is paying the most suitable price. Barclays has implemented a series of compliance measure and they also implement extra internal controls regarding its submission of Libor and Euribor contributions. And Barclays Bank shall be supervised and monitored by the