The Libor scandal was a series of fraudulent actions connected to the Libor (London Interbank Offered Rate) and also the resulting investigation and reaction. The Libor is an average interest rate calculated through submissions of interest rates by major banks in London. The scandal arose when it was discovered that banks were falsely inflating or deflating their rates so as to profit from trades, or to give the impression that they were more creditworthy than they were. Libor underpins approximately $350 trillion in derivatives. It is currently administered by NYSE Euronext, which took over running the Libor in January 2014.
The banks are supposed to submit the actual interest rates they are paying, or would expect to pay, for borrowing from other banks. The Libor is supposed to be the total assessment of the health of the financial system because if the banks being polled feel confident about the state of things, they report a low number and if the member banks feel a low degree of confidence in the financial system, they report a higher interest rate number. In June 2012, multiple criminal settlements by Barclays Bank revealed significant fraud and collusion by member banks connected to the rate submissions, leading to the scandal.
Because Libor is used in US derivatives markets, an attempt to manipulate Libor is an attempt to manipulate US derivatives markets, and thus a violation of American law. Since mortgages, student loans, financial derivatives, and other financial products often rely on Libor as a reference rate, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide.
On 27 July 2012, the Financial Times published an article by a former trader which stated that Libor manipulation had been common since at least 1991. Further reports on this have since come from the BBC and Reuters. On 28 November 2012, the Finance Committee of the Bundestag held a hearing to learn more about the issue.
The British Bankers' Association said on 25 September 2012 that it would transfer oversight of Libor to UK regulators, as predicted by bank analysts, proposed by Financial Services Authority managing director Martin Wheatley's independent review recommendations. Wheatley's review recommended that banks submitting rates to Libor must base them on actual inter-bank deposit market transactions and keep records of those transactions, that individual banks' LIBOR submissions be published after three months, and recommended criminal sanctions specifically for manipulation of benchmark interest rates. Financial institution customers may experience higher and more volatile borrowing and hedging costs after implementation of the recommended reforms. The UK government agreed to accept all of the Wheatley Review's recommendations and press for legislation implementing them.
Significant reforms, in line with the Wheatley Review, came into effect in 2013 and a new administrator will take over in early 2014. The UK controls Libor through laws made in the UK Parliament. In particular, the Financial Services Act 2012 brings Libor under UK regulatory oversight and creates a criminal offence for knowingly or deliberately making false or misleading statements relating to benchmark-setting.
As of August 2015[update], UBS trader Thomas Alexander William Hayes was the only person convicted in connection with the Libor scandal. In the UK, six bankers accused over Libor were cleared in early 2016.
- 1 Early reports of Libor manipulation
- 2 Breadth of scandal becomes apparent
- 3 Libor banks are sued in civil court
- 4 Reactions and impact on banking regulation
- 5 Fines for manipulation
- 6 See also
- 7 References
- 8 External links
Early reports of Libor manipulation
WSJ Libor study
On 16 April 2008, The Wall Street Journal released a controversial article, and later study, suggesting that some banks might have understated borrowing costs they reported for the Libor during the 2008 credit crunch that may have misled others about the financial position of these banks. In response, the BBA claimed that the Libor continued to be reliable even in times of financial crisis. Other authorities contradicted The Wall Street Journal article saying there was no evidence of manipulation. In its March 2008 Quarterly Review, the Bank for International Settlements stated that "available data do not support the hypothesis that contributor banks manipulated their quotes to profit from positions based on fixings." Further, in October 2008, the International Monetary Fund published its regular Global Financial Stability Review which also found that "Although the integrity of the U.S. dollar Libor-fixing process has been questioned by some market participants and the financial press, it appears that U.S. dollar Libor remains an accurate measure of a typical creditworthy bank's marginal cost of unsecured U.S. dollar term funding."
A study by economists, Snider and Youle, in April 2010, however, corroborated the results of the earlier Wall Street Journal study that the Libor submissions by some member banks were being understated. Unlike the earlier study, Snider and Youle suggested that the reason for understatement by member banks was not that the banks were trying to appear strong, especially during the financial crisis period of 2007 to 2008, but rather that the banks sought to make substantial profits on their large Libor interest-linked portfolios. For example, in the first quarter of 2009, Citigroup had interest rate swaps of notional value of $14.2 trillion, Bank of America had interest rate swaps of notional value of $49.7 trillion and JPMorgan Chase had interest rate swaps of notional value of $49.3 trillion. Given the large notional values, a small unhedged exposure to the Libor could generate large incentives to alter the overall Libor. In the first quarter of 2009, Citigroup for example reported that it would make that quarter $936 million in net interest revenue if interest rates would fall by .25 percentage points a quarter, and $1,935 million if they were to fall by 1 percentage point instantaneously. More recently, econophysicist A.F. Bariviera published two papers analyzing Libor time series. The importance of these papers rely on the analysis of raw Libor data, without assuming an ex ante model. The first one has the suggestive title The (in)visible hand in the Libor market: an information theory approach and was published in August 2015. The authors analize Libor rates in British pounds between 1999 and 2014, using an advanced pioneering statistical tool called the Complexity Entropy Causality Plane. They detected an anomalous behavior in the Libor, especially around the time of the 2008 financial crisis, that could be consistent with data manipulation. The symbolic analysis revealed the peculiar behavior of Libor vis-à-vis other market rates. In the same line and going deeper into the analysis, Bariviera and coauthors published an extensive analysis of Libor interest rates for seven different maturities and five currencies, during the period 2001-2015. The analysis is performed by means of two quantifiers derived from information theory: the permutation Shannon entropy and the permutation Fisher information measure. They found an anomalous behavior in all currencies, except for the euro during the years 2006-2012. In particular they found that 1-month, 2-month, and 3-month maturities were governed by a different process from the other maturities. Although the proposed method is not aimed to find data manipulation, but rather to discriminate different stochastic structures present in time series, the result are very useful. Additionally, the methodology of their paper is suitable for monitoring the market, as it can provide an early warning of an abnormal behavior of key economic variables.
Central banks aware of Libor flaws
The Governor of the Bank of England, Mervyn King, by the end of 2008, described the Libor to the UK Parliament saying "It is in many ways the rate at which banks do not lend to each other, ...it is not a rate at which anyone is actually borrowing."
The New York Federal Reserve chose to take no action against them at that time. Minutes by the Bank of England similarly indicated that the bank and its deputy governor Paul Tucker were also aware as early as November 2007 of industry concerns that the Libor rate was being under-reported. In one 2008 document, a Barclays employee told a New York Fed analyst, "We know that we're not posting an honest Libor, and yet we are doing it, because if we didn't do it, it draws unwanted attention on ourselves."
The documents show that in early 2008, a memo written by then New York Fed President Tim Geithner to Bank of England chief Mervyn King looked into ways to "fix" Libor. While the released memos suggest that the New York Fed helped to identify problems related to Libor and press the relevant authorities in the UK to reform, there is no documentation that shows any evidence that Geithner's recommendations were acted upon or that the Fed tried to make sure that they were. In October 2008, several months after Geithner's memo to King, a Barclays employee told a New York Fed representative that Libor rates were still "absolute rubbish."
The Wall Street Journal reported in March 2011 that regulators were focusing on Bank of America Corp., Citigroup Inc. and UBS AG in their probe of Libor rate manipulation. A year later, it was reported in February 2012 that the US Department of Justice was conducting a criminal investigation into Libor abuse. Among the abuses being investigated were the possibility that traders were in direct communication with bankers before the rates were set, thus allowing them an unprecedented amount of insider knowledge into global instruments. In court documents, a trader from the Royal Bank of Scotland claimed that it was common practice among senior employees at his bank to make requests to the bank's rate setters as to the appropriate Libor rate, and that the bank also made on occasions rate requests for some hedge funds. One trader's messages from Barclays Bank indicated that for each basis point (0.01%) that Libor was moved, those involved could net, "about a couple of million dollars."
The Canadian Competition Bureau was reported on 15 July 2012 to also be carrying out an investigation into price fixing by five banks of the yen denominated Libor rates. Court documents filed indicated that the Competition Bureau had been pursuing the matter since at least January 2011. The documents offered a detailed view of how and when the international banks allegedly colluded to fix the Libor rates. The information was based on a whistleblower who traded immunity from prosecution in exchange for turning on his fellow conspirators. In the court documents, a federal prosecutor for the bureau stated, "IRD (interest-rate derivatives) traders at the participant banks communicated with each other their desire to see a higher or lower yen LIBOR to aid their trading positions." The alleged participants were the Canadian branches of the Royal Bank of Scotland, HSBC, Deutsche Bank, JP Morgan Bank, and Citibank, as well as ICAP (Intercapital), an interdealer broker.
Breadth of scandal becomes apparent
By 4 July 2012, the breadth of the scandal was evident and became the topic of analysis on news and financial programs that attempted to explain the importance of the scandal. Two days later, it was announced that the UK Serious Fraud Office had also opened a criminal investigation into manipulation of interest rates. The investigation was not limited to Barclays. It has been reported since then that regulators in at least ten countries on three different continents are investigating the rigging of the Libor and other interest rates. Around 20 major banks have been named in investigations and court cases.
Early estimates are that the rate manipulation scandal cost US states, counties, and local governments at least $6 billion in fraudulent interest payments, above $4 billion that state and local governments have already had to spend to unwind their positions exposed to rate manipulation. An increasingly smaller set of banks are participating in setting the Libor, calling into question its future as a benchmark standard, but without any viable alternative to replace it.
United States investigations
The United States Congress began investigating on 10 July. Senate Banking Committee Chairman Tim Johnson (D., South Dakota) said he would question Treasury Secretary Timothy Geithner and Federal Reserve chairman Ben Bernanke about the scandal during scheduled hearings. Rep. Randy Neugebauer (R., Texas) of the House Financial Services Committee, wrote New York Federal Reserve (New York Fed) President William Dudley. He was seeking records of communications between the New York Fed and Barclays between August 2007 and November 2009 related to Libor-like rates.
On 4 October 2012, Republican US Senators Chuck Grassley (Iowa) and Mark Kirk (Illinois) announced that they were investigating Treasury Secretary Tim Geithner for complicity with the rate manipulation scandal. They accused Geithner of knowledge of the rate-fixing, and inaction which contributed to litigation that "threatens to clog our courts with multi-billion dollar class action lawsuits" alleging that the manipulated rates harmed state, municipal and local governments. The senators said that an American-based interest rate index is a better alternative which they would take steps towards creating.
Federal Housing Finance Agency Inspector General and auditor Steve A. Linick said in a 3 November memo that Fannie Mae and Freddie Mac may have lost more than $3 billion because of the manipulation.
Appearing before Parliament on 16 July, Jerry del Missier, a former senior Barclays executive, said that he had received instructions from Robert Diamond to lower rates after Diamond's discussions with bank regulators. He said that he had received information of a conversation between Diamond and Paul Tucker, deputy governor of the Bank of England, in which they had discussed the bank's financial position at the height of the 2008 financial crisis. It was his understanding that senior British government officials had instructed the bank to alter the rates. Del Missier's testimony followed statements from Diamond in which he denied that he had told his deputies to report false Libor rates. Speaking before Parliament the previous week, Tucker stated that he had shared concerns regarding Barclays Libor rates because the markets might view Barclays to be at risk if its Libor submissions continued to be higher than those of other international banks. In the midst of the Lehman Brothers collapse, there was concern the bank might need to be bailed out if the financial markets perceived it was a credit risk. Tucker told the committee, "I wanted to make sure that Barclays' day-to-day funding issues didn't push it over the cliff."
Libor banks are sued in civil court
Libor fixing operates as a cartel
In court documents filed in Singapore, Royal Bank of Scotland (RBS) trader Tan Chi Min told colleagues that his bank could move global interest rates and that the Libor fixing process in London had become a cartel. Tan in his court affidavit stated that the Royal Bank of Scotland knew of the Libor rates manipulation and that it supported such actions. In instant messages, traders at RBS extensively discussed manipulating Libor rates. In a released transcript of a 21 August 2007 chat, Jezri Mohideen, who was the head of yen products in Singapore, asked to have the Libor fixed in a conversation with other traders:
- Mohideen: "What's the call on the Libor?”
- Trader 2: "Where would you like it, Libor that is?”
- Trader 3: "Mixed feelings, but mostly I'd like it all lower so the world starts to make a little sense."
- Trader 4: "The whole HF [hedge fund] world will be kissing you instead of calling me if Libor move lower."
- Trader 2: "OK, I will move the curve down 1 basis point, maybe more if I can."
In another conversation on 27 March 2008, Tan asked that RBS raise its Libor submission and noted that an earlier lower figure that the bank had submitted had cost his team £200,000. In other released instant chats, Tan made it clear that the Libor fixing process had become a highly lucrative money making cartel. Tan in a conversation with traders at other banks, including Deutsche Bank's Mark Wong said on 19 August 2007:
- Tan: "It's just amazing how Libor fixing can make you that much money or lose if opposite. It's a cartel now in London."
- Wong: "Must be damn difficult to trade man, especially [if] you [are] not in the loop."
Mortgage rates manipulated on reset date
Homeowners in the US filed a class action lawsuit in October 2012 against twelve of the largest banks which alleged that Libor manipulation made mortgage repayments more expensive than they should have been.
Statistical analysis indicated that the Libor rose consistently on the first day of each month between 2000 and 2009 on the day that most adjustable-rate mortgages had as a change date on which new repayment rates would "reset". An email referenced in the lawsuit from the Barclay's settlement, showed a trader asking for a higher Libor rate because "We're getting killed on our three-month resets." During the analysed period, the Libor rate rose on average more than two basis points above the average on the first day of the month, and between 2007 and 2009, the Libor rate rose on average more than seven and one-half basis points above the average on the first day of the month.
The five lead plaintiffs included a pensioner whose home was repossessed after her subprime mortgage was securitised into Libor-based collateralised debt obligations, sold by banks to investors, and foreclosed. The plaintiffs could number 100,000, each of whom has lost thousands of dollars. The complaint estimates that the banks earned hundreds of millions, if not billions of dollars, in wrongful profits as a result of artificially inflating Libor rates on the first day of each month during the complaint period.
Municipalities lost billions due to rigging
The city of Baltimore and others in the US filed a class action lawsuit in April 2012 against Libor setting banks which alleged that the manipulation of Libor caused payments on their interest rate swaps to be smaller than they should have been. Before the financial crisis, states and localities bought $500 billion in interest rate swaps to hedge their municipal bond sales. It is estimated that the manipulation of Libor cost municipalities at least $6 billion. These losses were in addition to $4 billion that localities had already paid to unwind backfiring interest rate swaps.
Municipalities began using interest rate swaps to hedge their municipal bond sales in the late 1990s. At this time, investment bankers began offering local governments a way to save money on the sale of municipal bonds. The banks suggested instead of selling fixed interest rate bonds that local governments sell variable interest rate bonds which typically have interest rates as much as one percentage point lower than fixed interest rate bonds. For a municipal government this could mean saving as much as $1 million a year on the sale of a $100 million bond.
To hedge costs on the sale of variable interest rate bonds, which can rise and fall with the market, local governments, such as Baltimore, purchased interest rate swaps which exchange a variable interest rate for a fixed interest rate. In a swap deal, when the interest rate rises, the swap seller pays the local government the increased cost on the bond, while when the interest rate falls, the swap seller saves and pays the local government the decreased cost on the bond. The interest rate swap mechanism generally works well, however, between 2007 and 2010 the payments to local governments on their swaps artificially decreased but the cost on their bonds remained at actual market rates. This was because most interest rate swaps are linked to the Libor interest rate, while municipal bond rates are linked to the SIFMA Municipal Bond Index interest rate. During the financial crisis the two benchmark rates decoupled. Municipalities continued to pay on their bonds at the actual market Sifma rate but were paid on their interest rate swaps at the artificially lower Libor rate.
Reactions and impact on banking regulation
The cost to colluding and suspect banks from litigation, penalties, and loss of confidence may drive down finance industry profits for years. The cost of litigation from the scandal may exceed that of asbestos lawsuits.
US experts such as former Assistant Secretary of the Treasury Paul Craig Roberts have argued that the Libor Scandal completes the picture of public and private financial institutions manipulating interest rates to prop up the prices of bonds and other fixed income instruments, and that "the motives of the Fed, Bank of England, US and UK banks are aligned, their policies mutually reinforcing and beneficial. The Libor fixing is another indication of this collusion." In that perspective they advocate stricter bank regulation, and a profound reform of the Federal Reserve System.
Former Citigroup chairman and CEO Sandy Weill, considered one of the driving forces behind the considerable financial deregulation and "mega-mergers" of the 1990s, surprised financial analysts in Europe and North America by calling for splitting up the commercial banks from the investment banks. In effect, he says, "Bring back the Glass-Steagall Act of 1933 which led to half a century, free of financial crises."
Mainland European scholars discussed the necessity of far-reaching banking reforms in light of the current crisis of confidence, recommending the adoption of binding regulations that would go further than the Dodd–Frank Act: notably in France where SFAF and World Pensions Council (WPC) banking experts have argued that, beyond national legislations, such rules should be adopted and implemented within the broader context of separation of powers in European Union law, to put an end to anti-competitive practices akin to exclusive dealing and limit conflicts of interest. This perspective gained ground after the unraveling of the Libor scandal, with mainstream opinion leaders such as the Financial Times' editorialists calling for the adoption of an EU-wide "Glass–Steagall II."
notion that the entire global financial system is riddled with systemic fraud – and that key players in the gatekeeper roles, both in finance and in government, including regulatory bodies, know it and choose to quietly sustain this reality – is one that would have only recently seemed like the frenzied hypothesis of tinhat-wearers.
It is very hard, looking at the elaborate edifices of fraud that are emerging across the financial system, to ignore the possibility that this kind of silence – "the willingness to not rock the boat" – is simply rewarded by promotion to ever higher positions, ever greater authority. If you learn that rate-rigging and regulatory failures are systemic, but stay quiet, well, perhaps you have shown that you are genuinely reliable and deserve membership of the club.
The British Bankers' Association said on 25 September 2012 that it would transfer oversight of Libor to UK regulators, as proposed by Financial Services Authority managing director Martin Wheatley and CEO-designate of the new Financial Conduct Authority. On 28 September, Wheatley's independent review was published, recommending that an independent organisation with government and regulator representation, called the Tender Committee, manage the process of setting Libor under a new external oversight process for transparency and accountability. Banks that make submissions to Libor would be required to base them on actual inter-bank deposit market transactions and keep records of their transactions supporting those submissions. The review also recommended that individual banks' Libor submissions be published, but only after three months, to reduce the risk that they would be used as a measure of the submitting banks' creditworthiness. The review left open the possibility that regulators might compel additional banks to participate in submissions if an insufficient number do voluntarily. The review recommended criminal sanctions specifically for manipulation of benchmark interest rates such as the Libor, saying that existing criminal regulations for manipulation of financial instruments were inadequate. Libor rates could be higher and more volatile after implementation of the reforms, so financial institution customers may experience higher and more volatile borrowing and hedging costs. The UK government agreed to accept all of the Wheatley Review's recommendations and press for legislation implementing them.
Bloomberg LP CEO Dan Doctoroff told the European Parliament that Bloomberg LP could develop an alternative index called the Bloomberg Interbank Offered Rate that would use data from transactions such as market-based quotes for credit default swap transactions and corporate bonds.
The administration of Libor has itself become a regulated activity overseen by the UK's Financial Conduct Authority. Furthermore, knowingly or deliberately making false or misleading statements in relation to benchmark-setting was made a criminal offence in UK law under the Financial Services Act 2012.
From the end of July 2013, only five currencies and seven maturities will be quoted every day (35 rates), reduced from 150 different Libor rates – 15 maturities for each of ten currencies, making it more likely that the rates submitted are underpinned by real trades.
Since the beginning of July 2013, each individual submission that comes in from the banks is embargoed for three months to reduce the motivation to submit a false rate to portray a flattering picture of creditworthiness.
A new code of conduct, introduced by a new interim oversight committee, builds on this by outlining the systems and controls firms need to have in place around Libor. For example, each bank must now have a named person responsible for Libor, accountable if there is any wrongdoing. The banks must keep records so that they can be audited by the regulators if necessary.
In early 2014, NYSE Euronext will take over the administration of Libor from the British Bankers Association. The new administrator is NYSE Euronext Rates Administration Limited, a London-based, UK registered company, regulated by the UK's Financial Conduct Authority.
Australian regulators are currently still investigating involvement of Australian banks in manipulation of key market interest rates. The Australian Securities and Investments Commission has named the Australia and New Zealand Banking Group as being "obstructionist" towards this investigation. While the outcome of the investigation is still pending, one Australian man has been charged in relation to Libor.
Fines for manipulation
On 27 June 2012, Barclays Bank was fined $200 million by the Commodity Futures Trading Commission, $160 million by the United States Department of Justice and £59.5 million by the Financial Services Authority for attempted manipulation of the Libor and Euribor rates. The United States Department of Justice and Barclays officially agreed that "the manipulation of the submissions affected the fixed rates on some occasions".
Barclays manipulated rates for at least two reasons. Routinely, from at least as early as 2005, traders sought particular rate submissions to benefit their financial positions. Later, during the 2007–2012 global financial crisis, they artificially lowered rate submissions to make their bank seem healthy.
Following the interest rate rigging scandal, Marcus Agius, chairman of Barclays, resigned from his position. One day later, Bob Diamond, the chief executive officer of Barclays, also resigned from his position. Bob Diamond was subsequently questioned by the Parliament of the United Kingdom regarding the manipulation of Libor rates. He said he was unaware of the manipulation until that month, but mentioned discussions he had with Paul Tucker, deputy governor of the Bank of England. Tucker then voluntarily appeared before parliament, to clarify the discussions he had with Bob Diamond. He said he had never encouraged manipulation of the Libor, and that other self-regulated mechanisms like the Libor should be reformed.
On 19 December 2012, UBS agreed to pay regulators $1.5 billion ($1.2 billion to the US Department of Justice and the Commodity Futures Trading Commission, £160m to the UK Financial Services Authority and 60m CHF to the Swiss Financial Market Supervisory Authority) for its role in the scandal. The investigations revealed that UBS traders had colluded with other panel banks and had made over 2,000 written requests for movements in rates from at least January 2005 to at least June 2010 to benefit their trading positions. According to transcripts released by the UK's Financial Services Authority, UBS traders also offered financial inducements to interdealer brokers to help manipulate rates by spreading false information. In one exchange between a UBS banker identified as Trader A and an interdealer broker, the banker wrote,
if you keep 6s [i.e., the six-month JPY Libor rate] unchanged today … I will f—ing do one humongous deal with you … Like a 50,000 buck deal, whatever … I need you to keep it as low as possible … if you do that …. I'll pay you, you know, 50,000 dollars, 100,000 dollars… whatever you want … I'm a man of my word.
US Assistant Attorney General Lanny Breuer described the conduct of UBS's as "simply astonishing" and declared the US would seek, as a criminal matter, the extradition of traders Thomas Alexander William Hayes and Roger Darin. The bank has stated that these and other fines would probably result in a significant fourth-quarter loss in 2012. The fine levied by the FSA, reduced due to the bank's co-operation, was the largest in the agency's history.
In September 2013, ICAP settled allegations that they had manipulated Libor. The United States Department of Justice charged three former employees, and ICAP paid $65 million to the US's Commodity Futures Trading Commission and £14 million ($22 million) to Britain's Financial Conduct Authority.
In December 2013 the European Commission announced fines for six financial institutions participating in one or more bilateral cartels relating to Libor submissions for Japanese yen in the period from 2007 to 2010. UBS received full immunity for revealing the existence of the cartels (due to Leniency policy) and thereby avoided a fine of around €2.5 billion for its participation in multiple infringements. Citigroup received full immunity for one of the infringements in which it participated, thereby avoiding a fine of around €55 million, but was fined €70 million for other infringements. The Royal Bank of Scotland was fined €260 million, Deutsche Bank €259 million, JPMorgan €80 million and broker RP Martin €247 thousand. In July 2014, US and UK regulators slapped a combined £218 million ($370 million) in fines on Lloyds and a number of subsidiaries over the its part in the Libor fixing, and other rate manipulations and false reporting.
On 23 April 2015, Deutsche Bank agreed to a combined US$2.5 billion in fines – a US$2.175 billion fine by American regulators, and a €227 million penalty by British authorities – for its involvement in the Libor scandal. The company also pled guilty to wire fraud, acknowledging that at least 29 employees had engaged in illegal activity. It will be required to dismiss all employees who were involved with the fraudulent transactions. However, no individuals will be charged with criminal wrongdoing. In a Libor first, Deutsche Bank will be required to install an independent monitor. Commenting on the fine, Britain's Financial Conduct Authority director Georgina Philippou said "This case stands out for the seriousness and duration of the breaches ... One division at Deutsche Bank had a culture of generating profits without proper regard to the integrity of the market. This wasn't limited to a few individuals but, on certain desks, it appeared deeply ingrained." The fine represented a record for interest rate related cases, eclipsing a $1.5 billion Libor related fine to UBS, and the then-record $450 million fine assessed to Barclays earlier in the case. The size of the fine reflected the breadth of wrongdoing at Deutsche Bank, the bank's poor oversight of traders, and its failure to take action when it uncovered signs of abuse internally.
At least three banks – JPMorgan, Citigroup, and Bank of America – are still under investigation for their involvement in the fraud.
- O'Toole, James (10 July 2012). "Explaining the Libor interest rate mess". CNN. Retrieved 16 July 2012.
- "The LIBOR Scandal Explained". Accounting Degree. Retrieved 17 July 2012.
- "Libor scandal explained and what rate-rigging means to you". USA Today. July 2012. Retrieved 3 August 2012.
- Calculating Interest. British Bankers' Association. Retrieved 17 July 2012.
- "CFTC Orders Barclays to pay $200 Million Penalty for Attempted Manipulation of and False Reporting concerning Libor and Euribor Benchmark Interest Rates".
- "Barclays Bank PLC Admits Misconduct Related to Submissions for the London Interbank Offered Rate and the Euro Interbank Offered Rate and Agrees to Pay $160 Million Penalty". Department of Justice. 27 June 2012. Retrieved 17 July 2012.
- "Barclays fined £59.5 million for significant failings in relation to Libor and Euribor".
- Keenan, Douglas (27 July 2012), "My thwarted attempt to tell of Libor shenanigans". Financial Times. (An extended version of this article is on the author's web site.)
- BBC News (10 August 2012), "Libor scandal: Review finds system 'no longer viable'".
- BBC News Online (10 August 2012), "Libor review: Wheatley says system must change".
- Reuters (7 August 2012), "Libor collusion was rife, culture went right to the top".
- "Britischer Finanzexperte berichtet von langjährigen Zinssatz-Manipulationen" – in German. An English summary is on the trader's web site.
- "Dissecting Barclays' Libor woes". Euro Money. 29 June 2012. Retrieved 7 January 2013.
'Regulators might look to quote Libor based on actual transactions, though the technical hurdles are enormous. Regulators will try to safeguard the model rather than find an alternative to Libor.'
- Main, Carla (26 September 2012). "Libor Spurned, Credit Score Review, Germany's Audit: Compliance". Bloomberg. Retrieved 26 September 2012.
- Alexis Levine and Michael Harquail (5 October 2012) "Wheatley Review May Mean Big Changes for Libor" Blakes Business (Blake, Cassels & Graydon LLP)
- Karen Brettell (28 September 2012) "Libor reform may add volatility, increase some funding costs". Reuters
- Ainsley Thomson (17 October 2012) "UK Treasury Minister: Government Accepts Recommendations Of Wheatley Libor Review In Full" Dow Jones Newswires/Fox Business
- Anthony Browne, chief executive of the British Bankers' Association (11 July 2013). "Libor now has a new administrator – but our reforms have gone much further". City A.M. Retrieved 20 July 2013.
- "BBA Libor Benchmark Administrator's News". The British Bankers' Association. Retrieved 25 July 2013.
- "UK Government Policy: Creating stronger and safer banks". UK Government. 17 July 2013. Retrieved 21 July 2013.
- "UK Parliament General Committee Debates". UK Parliament. 27 February 2013. Retrieved 22 July 2013.
- "Financial Services Bill receives Royal Assent" (Press release). UK Government. 19 December 2012. Retrieved 27 July 2013.
- "Behind the Libor Scandal". The New York Times. 10 July 2012. Retrieved 13 July 2012.
- Mollenkamp, Carrick; Whitehouse, Mark (29 May 2008). "Study Casts Doubt on Key Rate". The Wall Street Journal. Retrieved 24 July 2012.
- Gyntelberg, Jacob; Wooldridge, Philip (March 2008). "Interbank rate fixings during the recent turmoil" (PDF). BIS Quarterly Review (Bank for International Settlements): 70. ISSN 1683-0121. Retrieved 10 July 2012.
- "Global Financial Stability Report" (PDF). World economic and financial surveys (International Monetary Fund): 76. October 2008. ISSN 1729-701X. Retrieved 11 July 2012.
- Carl Schreck (11 October 2012) "US Students Detected Libor-Fixing Years Before Banking Scandal" RIA Novosti
- Snider, Conan; Thomas Youle (2 April 2010). "Does the Libor Reflect Banks' Borrowing Costs?". Social Science Research Network: 13–14. Retrieved 22 July 2012.
- Snider, Conan; Thomas Youle (2 April 2010). "Does the Libor Reflect Banks' Borrowing Costs?". Social Science Research Network: 11. Retrieved 22 July 2012.
- Snider, Conan; Thomas Youle (2 April 2010). "Does the Libor Reflect Banks' Borrowing Costs?". Social Science Research Network: 12. Retrieved 22 July 2012.
- Bariviera, Aurelio Fernandez; Guercio, María Belén; Martinez, Lisana B.; Rosso, Osvaldo A. (12 August 2015). "The (in)visible hand in the Libor market: an information theory approach". The European Physical Journal B 88 (8). doi:10.1140/epjb/e2015-60410-1.
- Bariviera, Aurelio Fernández; Guercio, María Belén; Martinez, Lisana B.; Rosso, Osvaldo A. (2 November 2015). "A permutation information theory tour through different interest rate maturities: the Libor case". Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences 373 (2056): 20150119. doi:10.1098/rsta.2015.0119.
- Stephanie Flanders (4 July 2012). Inconvenient truths about Libor. BBC News. Retrieved 17 July 2012.
- (12 January 2009). House of Commons – Treasury – Minutes of Evidence. Q34. Retrieved 17 July 2012.
- Jill Treanor & Dominic Rushe (13 July 2012). Timothy Geithner and Mervyn King discussed Libor worries in 2008. The Guardian. Retrieved 17 July 2012.
- Mark Gongloff (13 July 2012). New York Fed's Libor Documents Reveal Cozy Relationship Between Regulators, Banks. The Huffington Post. Retrieved 17 July 2012.
- Alex Klein (13 July 2012). "Rate-Fixing Scandal Hits U.S.: Fed Drops LIBOR Bombshells". The Daily Beast.
- "Attendees" (PDF). Bank of England. Retrieved 7 January 2013.
- Jia Lynn Yang (13 July 2012). Paul Tucker, deputy governor of the Bank of England.Geithner made recommendations on Libor in 2008, documents show. The Washington Post. Retrieved 17 July 2012.
- 13 July 2012 Libor email from Timothy Geithner to Bank of England. The Guardian. Retrieved 17 July 2012.
- Enrich, David; Mollenkamp, Carrick; and Eaglesham, Jean (18 March 2011). "U.S. Libor Probe Includes BofA, Citi, UBS". The Wall Street Journal.
- "U.S. conducting criminal Libor probe". Reuters. 28 February 2012.
- "Eagle fried". The Economist. 30 June 2012. Retrieved 20 July 2012.
- Armstrong, Rachel (30 March 2012). "Ex-RBS trader says Brevan Howard sought Libor rate change". Reuters.
- Julian Beltrame (15 July 2012). Canadian connection to Libor scandal probed by Competition Bureau. National Post. Retrieved 17 July 2012.
- Capitalism Without Failure coverage of a discussion among Matt Taibbi, Eliott Spitzer, and Dennis Kelleher on Viewpoint with Eliot Spitzer on 4 July 2012 regarding the emerging Libor Scandal
- Carla Main & Ellen Rosen (9 July 2012). Libor Criminal Probe, CFTC Exemptions, Canada. Bloomberg BusinessWeek. Retrieved 17 July 2012.
- Treanor, Jill (6 July 2012). "Serious Fraud Office to investigate Libor manipulation". The Guardian (London). Retrieved 10 July 2012.
- David Enrich & Dana Cimilluca (15 July 2012). Missteps on Libor Doomed Barclays's Leaders. The Wall Street Journal. Retrieved 17 July 2012.
- "Libor Lies Revealed in Rigging of $300 Trillion Benchmark". Bloomberg.
- "The rotten heart of finance". The Economist. 7 July 2012. Retrieved 17 July 2012.
- Darrell Preston (10 October 2012) "Rigged Libor costs states, localities $6 billion" Bloomberg
- John Glover (8 October 2012) "Libor, Set by Fewer Banks, Losing Status as a Benchmark" Bloomberg Business Week
- Reddy, Sudeep (11 July 2012). "Congress Joins Libor Probes: Focus Includes U.S. Regulators Who Knew About Problem as Early as 2007". The Wall Street Journal. p. C2. Retrieved 11 July 2012.
- HITC Business (4 October 2012) "Senators Launch Investigation Into Treasury Secretary Geithner’s Involvement In Libor Manipulation" (FOX Business)
- Clea Benson (19 December 2012) "Fannie Mae, Freddie Mac Libor Loss Tops $3 Billion in Audit" Bloomberg
- Scott, Mark (16 July 2012). "Former Senior Barclays Executive Faces Scrutiny in Parliament". The New York Times (London).
- Tan, Andrea (26 September 2012). "RBS Instant Messages Show Libor Rates Skewed for Traders". Bloomberg. Retrieved 30 September 2012.
- Binham, Caroline (15 October 2012). "US Woman Takes on Banks Over Libor". Financial Times. Retrieved 15 October 2012.
- Touryalai, Halah (15 October 2012). "Banks Rigged Libor To Inflate Adjustable-Rate Mortgages: Lawsuit". Forbes. Retrieved 15 October 2012.
- Reuters (14 October 2012) "Home owners file class action suit versus banks over Libor: FT" Chicago Tribune Business
- "In re: Libor-Based Financial Instruments Antitrust Litigation" (PDF). 2012 WL 1522306 (S.D.N.Y.) (Trial Pleading). United States District Court, S.D. New York. Retrieved 19 October 2012.
- Preston, Darrell (8 October 2012). "Rigged Libor Hits States-Localities With $6 Billion: Muni Credit". Bloomberg. Retrieved 19 October 2012.
- Gandel, Stephen (11 July 2012). "Wall Street's latest sucker: Your hometown". Fortune. Retrieved 19 October 2012.
- Rushe, Dominic (19 July 2012). "Baltimore and the Libor scandal: 'We can't leave any money on the table'". The Guardian (London). Retrieved 19 October 2012.
- Shawn D. Baldwin (26 October 2012) "LIBOR Liabilities: How litigation will drive down banks profitability for years to come" Forbes
- Paul Craig Roberts and Nomi Prins (14 July 2012). "The Real Libor Scandal". Paul Craig Roberts. Retrieved 28 August 2013.
- Denning, Steve (25 July 2012). "Rethinking Capitalism: Sandy Weill Says Bring Back Glass-Steagall". Forbes. Retrieved 25 July 2012. Quoting interview on CNBC's Squawk-Box.
- M Nicolas Firzli, Bank Regulation and Financial Orthodoxy: the Lessons from the Glass-Steagall Act, Revue Analyse Financière, Q1 2010 (PDF) (in French), retrieved 8 January 2010
- Nicolas J. Firzli quoted by Marie Lepesant (11 June 2012). "Le Modèle des Banques Françaises en Question". Le Parisien (in French). Retrieved 12 June 2012.
- "Restoring trust after Diamond". Financial Times. 3 July 2012. Retrieved 15 July 2012. quoting FT Editorial Page.
- Naomi Wolf (14 July 2012). This global financial fraud and its gatekeepers. The Guardian. Guardian News and Media. Retrieved 17 July 2012.
- Michelle Price “Libor tender puts focus on data providers”, "Financial News", 28 September 2012
- Ben Moshinsky and Lindsay Fortado “U.K. Lawmakers Seek Speedy Overhaul of Libor Following Review”, Bloomberg, 28 September 2012
- "LIBOR becomes a regulated activity" (Press release). The British Bankers' Association. 2 April 2013. Retrieved 25 July 2013.
- "Announcement of LIBOR changes" (Press release). The British Bankers' Association. 12 June 2013. Retrieved 25 July 2013.
- "Code of Conduct for Contributing Banks becomes Industry Guidance and Whistleblowing policy issued" (Press release). The British Bankers' Association. 15 July 2013. Retrieved 25 July 2013.
- "BBA Libor Limited has established the Interim LIBOR Oversight Committee (ILOC)" (Press release). The British Bankers' Association. 5 July 2013. Retrieved 25 July 2013.
- "NYSE EURONEXT SUBSIDIARY TO BECOME NEW ADMINISTRATOR OF LIBOR" (Press release). NYSE Euronext. 9 July 2013. Retrieved 21 July 2013.
- "BBA to hand over administration of LIBOR to NYSE Euronext Rate Administration Limited" (Press release). The British Bankers' Association. 9 July 2013. Retrieved 20 July 2013.
- "ANZ named as one of the 'appalling' banks in rate-fixing probe". Financial Review. Retrieved 2016-01-14.
- "Perth man becomes first Australian charged over Libor banking fraud". ABC News. Retrieved 2016-01-14.
- Pollock, Ian (28 June 2012). "Libor scandal: Who might have lost?". BBC. Retrieved 28 June 2012.
- "Statement of Facts" (PDF). United States Department of Justice. 26 June 2012. Retrieved 11 July 2012.
- Taibbi, Matt, Why is Nobody Freaking Out About the LIBOR Banking Scandal?, Rolling Stone, 3 July 2012
- "Libor scandal: Seven banks face US questioning". BBC. 16 August 2012.
- Reuters (2 July 2012). "Barclays chairman resigns over interest rate rigging scandal". NDTV profit. Retrieved 2 July 2012.
- "Barclays boss Bob Diamond resigns amid Libor scandal". BBC. 3 July 2012.
- Ram, Vidya (4 July 2012). "Bob Diamond resigns as Barclays CEO". Business Line. Retrieved 19 July 2012.
- Trotman, Andrew (4 July 2012). "Bob Diamond questioned by MPs on Barclays Libor scandal: as it happened". The Telegraph (London). Retrieved 10 July 2012.
- Moulds, Josephine (9 July 2012). "Bank of England deputy governor Paul Tucker fights Libor accusations – as it happened". The Guardian (London). Retrieved 10 July 2012.
- "UBS fined $1.5bn for Libor rigging". BBC. 19 December 2012. Retrieved 20 December 2012.
- Time. 20 December 2012 http://business.time.com/2012/12/20/libor-scandal-yep-its-as-bad-as-we-thought/. Missing or empty
- http://www.fsa.gov.uk/static/pubs/final/ubs.pdf pp.12
- Scott, Mark and Julia Werdigier (25 September 2013). "ICAP to Pay $87 Million Fine in Libor-Fixing Case". The New York Times. Retrieved 26 September 2013.
- "Antitrust: Commission fines banks € 1.71 billion for participating in cartels in the interest rate derivatives industry" (Press release). Brussels: European Commission. 4 December 2013. Retrieved 18 December 2013.
- "Britain's Lloyds Bank fined $370 mn over Libor rigging". Daily Mail. Retrieved 28 July 2014.
- "Deutsche Bank fined record $2.5 billion in rate rigging inquiry". Reuters. 23 April 2015. Retrieved 23 April 2015.
- Ben Protess; Jack Ewing (23 April 2015). "Deutsche Bank to Pay $2.5 Billion Fine to Settle Rate-Rigging Case". The New York Times. Retrieved 23 April 2015.
- Order Instituting Proceedings, In the matter of: Barclays Bank PLC, United States, Commodity Futures Trading Commission, 27 June 2012.
- Statement of Facts, Non-prosecution agreement: Barclays Bank PLC, United States, Department of Justice, 26 June 2012.
- Final Notice, Imposing financial penalty: Barclays Bank PLC, United Kingdom, Financial Services Authority, 27 June 2012.
- Administrative Action on Citigroup Global Markets Japan Inc, Japan, Financial Services Agency, 16 December 2011.
- Order Instituting Proceedings, In the matter of: Deutsche Bank AG, United States, Commodity Futures Trading Commission, 23 April 2015.
- Statement of Facts, Deferred prosecution agreement: Deutsche Bank AG, United States, Department of Justice, 23 April 2015.
- "Consent Order" (PDF). In the Matter of: Deutsche Bank AG. New York State Department of Financial Services. 23 April 2015.
- Final Notice 2015: Deutsche Bank AG, United Kingdom, Financial Conduct Authority, 23 April 2015.
ICAP Europe Limited
- Order Instituting Proceedings, In the matter of: ICAP Europe Limited, United States, Commodity Futures Trading Commission, 25 September 2013.
- Final Notice, Imposing financial penalty: ICAP Europe Ltd, United Kingdom, Financial Conduct Authority, 25 September 2013.
- United States of America v. Darrell Read, Daniel Wilkinson, and Colin Goodman, United States, Department of Justice, 25 September 2013.
- Order Instituting Proceedings, In the matter of: Lloyds Banking Group PLC, United States, Commodity Futures Trading Commission, 28 July 2014.
- Final Notice, Imposing financial penalty: Lloyds Bank PLC and Bank of Scotland PLC, United Kingdom, Financial Services Authority, 28 July 2014.
- Order Instituting Proceedings, In the matter of: Rabobank, United States, Commodity Futures Trading Commission, 29 October 2013.
- Statement of Facts, Deferred prosecution agreement: Rabobank, United States, Department of Justice, 29 October 2013.
- Final Notice, Imposing financial penalty: Rabobank, United Kingdom, Financial Conduct Authority, 29 October 2013.
- Libor and Euribor investigation findings and measures for Rabobank, Netherlands, De Nederlandsche Bank (the Dutch Central Bank), 29 October 2013.
- United States of America v. Paul Robson, Paul Thompson, Tetsuya Motomura, United States, Department of Justice, 13 January 2014.
- Robson et al Complaint, Exhibit of Facts, United States, Department of Justice, 13 January 2014.
Royal Bank of Scotland
- Order Instituting Proceedings, In the matter of: Royal Bank of Scotland PLC, United States, Commodity Futures Trading Commission, 6 February 2013.
- Plea agreement: United States of America v. RBS Securities Japan, United States, Department of Justice, 5 February 2013.
- Final Notice, Imposing financial penalty: Royal Bank of Scotland PLC, United Kingdom, Financial Services Authority, 6 February 2013.
- Administrative actions against RBS Securities Japan Limited, Japan, Financial Services Agency, 12 April 2013.
- Order Instituting Proceedings, In the matter of: UBS AG, United States, Commodity Futures Trading Commission, 19 December 2012.
- Statement of Facts, Non-prosecution agreement: UBS AG, United States, Department of Justice, 18 December 2012.
- Final Notice, Imposing financial penalty: UBS AG, United Kingdom, Financial Services Authority, 19 December 2012.
- FINMA Summary Report UBS LIBOR, Switzerland, Swiss Financial Market Supervisory Authority, 19 December 2012.
- United States of America v. Tom Hayes and Roger Darin, United States, Department of Justice, 12 December 2012.
- Hayes et al Complaint, Exhibit of Facts, United States, Department of Justice, 12 December 2012.
- Administrative Actions against UBS Securities Japan Ltd and UBS AG, Japan Branches, Japan, Financial Services Agency, 16 December 2011.
- Euro Interest Rate Derivatives Cartel: Barclays, Deutsche Bank, RBS, Société Générale, Belgium, Directorate-General for Competition, 12 December 2013.
- Swiss Franc Interest Rate Derivatives Cartel: JP Morgan, RBS, Belgium, Directorate-General for Competition (European Commission), 21 October 2014.
- Yen Interest Rate Derivatives Cartel: Citigroup, Deutsche Bank, JP Morgan, RBS, RP Martin, UBS, Belgium, Directorate-General for Competition (European Commission), 12 December 2013.
- The Wheatley Review of LIBOR: Final Report, United Kingdom, HM Treasury, 28 September 2012.
- Principles for Financial Benchmarks: Final Report, Spain, International Organization of Securities Commissions, July 2013.
- Documents concerning Barclays and the Libor matter, United States, Federal Reserve Bank of New York, 13 July 2012.
- Correspondence with the NY Fed and British Bankers’ Association in relation to Libor, United Kingdom, Bank of England, 13 July 2012.