Barclays fined £290m for manipulating interest rates to boost bonuses

 

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The Independent Online

The Barclays boss Bob Diamond will not receive his multimillion-pound bonus this year after the bank was caught taking part in a conspiracy to manipulate key borrowing rates for years. The exposure of the scandal will cost Barclays £290m in fines.

Investigators from the US and the UK discovered that Barclays traders routinely manipulated one of the world's most important interest rates, affecting everything from mortgage rates to the value of complex financial derivatives, all in the hope of increasing their trading profits and their own yearly bonuses.

At one point, Barclays was lying "on an almost daily basis" in the information it published to the market, according to a US regulator.

Mr Diamond, pictured, whose £28.3m pay package last year caused a political and public outcry, said he and three lieutenants would take "collective responsibility" for the scandal and would not ask for a bonus for 2012.

The bank has fired some of the people involved, although it declined to give details last night. "Nothing is more important to me than having a strong culture at Barclays," Mr Diamond said. "I am sorry that some people acted in a manner not consistent with our culture and values."

Jerry del Missier and Rich Ricci, who share the running of Barclays' investment banking division, and the company's chief financial officer, Chris Lucas, will also forgo bonuses. Last year, Mr del Missier and Mr Ricci each received packages worth more than £6m.

The British Financial Services Authority and the Commodities Futures Trading Commission (CFTC) uncovered dozens of email exchanges in which traders persuaded their colleagues to submit an artificial rate, just to benefit their trading positions.Barclays agreed to pay £59.5m to the FSA to settle the investigation, and the penalties in the US are even steeper. The CFTC levied a fine of $200m (£129m) and the DoJ will receive $160m from the bank.

The CFTC opened the investigation into the manipulation of Libor during the credit crisis, after suspecting banks were not playing by the rules.

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