Barclays Bank will pay a fine of $450 million to British and American authorities for attempting to rig key interest rates that influence the cost of borrowing, including mortgages and student loans. The funny business took place between 2005 and 2009.
Four of Barclays’ top executives will forgo bonuses this year as a result, including Chief Executive Bob Diamond.
The misconduct relates to the daily setting of the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).
These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial deals between banks and other institutions.
One of the US authorities involved, the US Commodity Futures Trading Commission (CFTC) described the importance of the Libor rates.
“People taking out small business loans, student loans and mortgages, as well as big companies involved in complex transactions, all rely on the honesty of benchmark rates like Libor for the cost of their borrowings.”