Regulators close to fining Lloyds over Libor ‘rigging’

Significantly, Lloyds was not among the banks accused by the European Union’s competition authorities of operating a cartel to fix euribor and yen Libor rates

associate Business editor

Lloyds looks set to be the next banking group to be hit with a heavy fine over alleged attempts by traders to manipulate Libor interest rates.

UK and US regulators have not penalised a bank since imposing a $1bn (£580m) fine last October, along with watchdogs  in the Netherlands, on the Dutch bank Rabobank.

However, discussions between regulators and Lloyds are reportedly now close to a conclusion, although it could still take a number of weeks for the part-state-owned lender to finalise a deal.

Lloyds’ penalty is expected to be at the lower end of the range of those imposed on banks. The biggest so far was the $1.5bn (£900m) fine for UBS in 2012, with Barclays, Royal Bank of Scotland and the broker Icap being hit with smaller penalties.

Significantly, Lloyds was not among the banks accused by the European Union’s competition authorities of operating a cartel to fix euribor and yen Libor rates. They imposed penalties totalling €1.7bn (£1.35bn) on eight banks. Another group of banks, and Icap, have opted to fight the EU. 

Since Rabobank was penalised, the only fine to be imposed by the Financial Conduct Authority (FCA), the City regulator, was a relatively small one for the broker RP Martin for “aiding and abetting” traders’ attempts to rig rates in exchange for payments and continued business. It was ordered to hand over $2.3m in instalments to the FCA and America’s Commodity Futures Trading Commission, although the penalty would have been triple that had the broker been able to afford it.

A Lloyds spokesperson said: “As we have disclosed, Lloyds Banking Group continues to receive requests for information from a number of government agencies with regard to their investigations into interbank offered rates (including Libor). We are co-operating with those investigations. If required, the group would update the market as appropriate.”

Settling any Libor-related issues would be viewed favourably by the Government, which has been steadily selling down its stake in Lloyds. The state now holds just 24.9 per cent of the shares after a second sale in March realised £4.2bn for the taxpayer. The shares closed at 72.87p yesterday.

The City’s attention has been focused more recently on other potential scandals related to pricing benchmarks  such as the continuing investigation into alleged data sharing and attempts to fix foreign exchange rates.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore