Trader E, Euribor, and the €30bn gamble
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Friday 20 July 2012
Moroccan-born Philippe Moryoussef, the former Barclays trader identified as being at the heart of the interest rate fixing scandal, had bets in the order of €30 billion resting on the rate of Euribor (the European equivalent of the UK's Libor) and appears to have been a domineering character over dealers at other banks.
The multi-millionaire was revealed yesterday as being the character named "Trader E" in the explosive Financial Services Authority report into the Libor fixing scandal, where he is repeatedly mentioned among those who fixed the price of Libor up or down in order to boost the profits on their trades.
In one example from 2007, the report describes how Moryous-sef appeared to hatch a plan to fix the Euribor "cash" rate so a trade linked to its level on a set date would make a bigger profit.
The plot appears to have begun in December 2006, when he declares his intention "to go long the march future" – in other words, build up a big bet that would benefit from a low March Euribor. In February, he sent a message to a trader at another bank on the Euribor panel: "If you know how to keep a secret I'll bring you in on it… we're going to push the cash downwards…if you breathe a word of this I'm not telling you anything else… I know my treasury's firepower… which will push the cash downwards… please keep it to yourself or it won't work."
The trick appeared to work, with transcripts showing Moryoussef delightedly telling another trader: "this is the way you pull off deals like this chicken, don't talk about it too much, 2 months of preparation… the trick is you must not do this alone… this is between you and me but really don't tell ANYBODY".
Moryoussef is also believed to be the unnamed "senior Euro swaps trader" referred to as the key player in the US watchdog report into Barclays' wrongdoing that was released at the same time as that of the FSA. One conversation in 2006 ran as follows: "I have a huge fixing on Monday… something like 30bn… and I would like it to be very very very high. Can you do something to help."
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