Dan Gledhill: Memories of the time that Libor ruled my life

 

Share
Related Topics

Reading the explosive emails which implicate Barclays traders in the crime of fixing Libor rates brought back memories of the days when this five-letter acronym meant financial life or death to me.

In the late 1990s, I worked for an American investment bank in London, effectively taking bets on whether I thought interest rates (in my case, US and Canadian interest rates) would go up or down. I would gamble that, for example, the three-month Canadian base rate would be above 5 per cent on a given date in the future. When the date arrived, the value of my bet (how much money it had made or lost) was determined by the Libor fix on that day.

So 11am, when the Libor rates are revealed every day, was a nervous time. I would sit glued to my screens as, one by one, the banks which between them calculated the fix came up with their numbers. Even then the process stank. The rates would bear little relationship to what was going on in the real market. One could only assume that they were skewed to suit the trading positions of these banks. If you weren't one of the institutions setting the rate, you were going to be disappointed.

The damage to my position would – on the very worst days – amount to hundreds of thousands of pounds (of my employer's money, that is). Larger-scale traders could lose (or make, if they worked for the right bank) millions on the stroke of 11. Which may explain why dealing rooms in my day tended to have adjourned for lunch by half-past.

Now, clearly, as a former City trader who saw the light, I'm not looking for sympathy. The real victims of this crime are not market professionals but the variable-rate mortgage borrowers and others who have now joined the ever-growing list of innocents who have been conned by the banks. What's interesting, though, is the fact that all of us in the dealing room where I worked knew this went on, but simply accepted it. Perhaps we just set the morality bar pretty low. But when this practice is exposed to the public gaze, it betrays a world where cheating was – and probably still is – institutionalised.

Dan Gledhill is deputy editor of 'The Independent' and a former trader with Bank of America

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Recruitment Genius: HR Advisor

Negotiable: Recruitment Genius: This organization has been a trusted partner t...

Recruitment Genius: Buyer / Planner

£20000 - £23000 per annum: Recruitment Genius: An excellent opportunity has ar...

Recruitment Genius: Marketing Manager

£40000 per annum: Recruitment Genius: This is a fantastic opportunity working ...

Recruitment Genius: Assistant Journals Manager

£33000 per annum: Recruitment Genius: The prime focus of the role is to assist...

Day In a Page

Read Next
 

The era of graduates from the university conveyor belt is over

Hamish McRae
The UCAS clearing house call centre in Cheltenham, England  

Ucas should share its data on students from poor backgrounds so we can get a clearer picture of social mobility

Conor Ryan
Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks