Barclay's LIBOR manipulation

dtaylor84

ChrisDuane wrote: »

On the BBC this morning they had Martin from Radio4's moneybox live in.

At the end he seemed to imply that all the trouble with Natwest/RBS and the banks in Ireland had something to do with this manipulation. The cover story about a computer glitch was just to distract from the truth.

I didn't hear the program, but I can assure you he did not say that. The two problems are completely unrelated and any attempt to claim the computer meltdown was deliberate [EDIT: or a cover story] is ridiculous.

He may, however, have said that RBS's troubles are about to get worse - as they are being investigated for similar manipulation (but again, this is completely separate to their recent woes).

chewmylegoff

michaels wrote: »

As I have already said:
) Unless the pool is extremely large then it is possible for 1 participant to impact the rate
2) Only those who have lost as a result of LIBOR manipulation (and not only those who have been in a trade with Barclays) will sue in the US for their money back. Given that Barclays will have to make up gross losses not net losses this will be extremely expensive and I would be surprised if Barclays get very far trying to recover any extra payments from those who gained from the market manipulation. I would be suprised if the gross loss from shifting libor by 1bp on one day would not be enough to bankrupt Barclays.

If I were an employee I would be looking to get my redundancy now in the hope of being able to hang on to some of it.

Who are the counter parties though? Other banks in the main I should think. Wonder what the other banks' submissions were like.........

John_Pierpoint

ILW wrote: »

[Manipulating House Prices?]In what way?

Back on the "Crash Crash ..." thread in 2008/9 there was extensive discussion about what did and what did not go into the various indices.
The most worrying was the Land Registry which seems to leave out any suggestion of distressed sale, such as the sale of repossessions.

The valuation of new flats and the "gifted deposit" kick back, were a side show in comparison.

A bit like LIBOR, the volume of transactions has shrunk a a fraction of its former turnover during the boom years.

purch

michaels wrote: »

I would be suprised if the gross loss from shifting libor by 1bp on one day would not be enough to bankrupt Barclays.

Yes, but for thousands of businesses, from multi-billion corporations to small husband and wife businesses the shift in LIBOR could well cause irreparable harm.

The main purpose of LIBOR (not main use) is to set the rate for Business and Corporate Lending.

Most Banks/Lenders will enter into contracts with their customers to lend at LIBOR plus 1/4,1/2 or 1 % or whatever.

Even a small shift in LIBOR could fatally hurt the finances of even the largest business.

LIBOR does not exist for the settling of Derivative Bets between Banks, that is just a side product that has come about recently.

LIBOR is the bedrock of the Financial System, and cannot be allowed to be broken.

DervProf

The Financial Sector - A significant part of the UK economy ("don't worry about our dwindling manufacturing, were have a thriving financial sector"), largely based in the "great" city of London seems to be run by fraudsters and cheats.

Makes the UK look a bit "Arthur Daley", doesn't it ?

grizzly1911

purch wrote: »

Even a small shift in LIBOR could fatally hurt the finances of even the largest business.

Any ideas what the shifts they managed were in relation to the then LIBOR?

One or two basis points on a wholesale deal may be big numbers but at the individual borrower level are these really going to be the make or break points for the majority?

vivatifosi

There was an interesting contributor on Radio 4 yesterday, who said that Diamond may not have known about what was going on but ran a culture in which Barclays had to be (can't remember the actual wording but in effect) extremely aggressive and competitive. Therefore while he wouldn't necessarily have known about it, he engendered the culture that fostered it through his style of leadership.

pqrdef

vivatifosi wrote: »

he engendered the culture that fostered it through his style of leadership.

I expect that's why they gave him the job. They pick people who know how to make money. But perhaps there's more to running a bank than making money.

pqrdef

I've got two questions.

(1) What happened to those Chinese walls we heard so much about at the time of the Big Bang in the 80s?

(2) What's the point of a banking licence, if something like this doesn't lead to the revocation of the licence?

JasonLVC

vivatifosi wrote: »

There was an interesting contributor on Radio 4 yesterday, who said that Diamond may not have known about what was going on but ran a culture in which Barclays had to be (can't remember the actual wording but in effect) extremely aggressive and competitive. Therefore while he wouldn't necessarily have known about it, he engendered the culture that fostered it through his style of leadership.

Nice post Viva, but you could have simply said "He turned a blind eye":cool::D