Every two months, representatives from the world’s largest banks meet at an undisclosed location to review the London interbank offered rate.
Who sits on the British Bankers’ Association’s Foreign Exchange and Money Markets Committee, the body that governs the benchmark for more than $300 trillion of securities worldwide, is a secret. No minutes are published. The BBA won’t identify any members, saying it wants to protect them from being lobbied, and [...]
The UK Conservative/Liberal Democrat government this week announced the terms of a review into the deepening London Interbank Offered Rate (Libor) crisis.
The review was commissioned by Chancellor George Osborne, and will be led by Martin Wheatley, managing director of the Financial Services Authority (FSA) and chief executive-designate of the Financial Conduct Authority.
Libor is a daily rate covering 10 currencies and is supposed to measure the average cost [...]
It was supposed to be win-win. The government agency got a slightly lower rate, while the investment bank earned fees. If the variable bond’s rate rose above the fixed rate target – the scenario that government finance officials feared most – the swap counterparty (the banks often off-loaded the instruments to speculators) paid off the government agency. If the variable bond rate went down, the swap payments moved in the [...]
(Reuters) – U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rigging scandal.
It’s kinda ironic that Reuters is reporting this info, since the very guy that took all the banks reports for the British Bankers Association, is now working for Reuters.
The director responsible for the management of [...]
By Roland Jones
It may seem like just another obscure banking scandal at a 322-year-old British bank, but there are a number of good reasons why you should care about the LIBOR rate-rigging scandal now roiling the world’s biggest and most powerful banks, including that it probably cost you money if you own a mortgage.
In late June, Barclays paid $453 million to regulators in the U.K and the U.S. to settle accusations that [...]
If Barclays Plc (BARC) would lie about its borrowing costs, what else would it lie about?
That question gets to the heart of the damage Barclays did to itself by submitting false numbers for years to the British Bankers’ Association as part of the surveys used to set the London interbank offered rate, the benchmark for $360 trillion of financial instruments globally. The most important asset any bank has is trust — especially [...]
Borrowing costs will rise if the Government pushes ahead with plans to give savers more protection against bank failures, the Chancellor has been told.
Bankers have warned George Osborne they will be pressured by bondholders and other corporate borrowers to increase rates to compensate for losing ground in the compensation pecking order.
Mr Osborne believes the banking claims are exaggerated. He is expected to release details of the better deal for savers [...]
Feb. 15 (Bloomberg) — JPMorgan Chase & Co., Deutsche Bank AG and HSBC Holdings Plc are among at least seven firms accused by another bank of participating in a conspiracy to manipulate the price of derivatives worldwide for more than three years.
The unnamed bank, seeking immunity, told Canada’s Competition Bureau that traders and cash brokers conspired to influence the Yen London interbank offered rate from 2007 to 2010 to profit [...]
By Dec. 1985 the Eurocurrency market was estimated by Morgan Guarantee bank to have a net size of 1,668B, of which 75% are likely eurodollars  . since it is not responsible to any government agency its growth is hard to estimate. The Eurodollar market is by a wide margin the largest source of global finance. In 1997, nearly 90% of all international loans were made this way .
The Eurodollar futures contract refers to [...]
Every workday morning in London, at about 10 o’clock, representatives from 19 banks make a series of decisions that affect financial transactions around the world, from what homeowners pay on their mortgages to the underlying value of credit-default swaps and corporate bonds.
The bankers’ power is unsettling, says Tim Price, who helps oversee more than $1.5 billion as director of investment at PFP Group LLP, an asset-management firm in London.
“It’s a [...]
UK leading economist warns of more house price falls and Head of British Bankers Association warns of a second credit crunch:
Home owners have been given a stark reminder of the precariousness of the housing market with a double warning.
Firstly, a leading economist said that house prices could fall 10pc within the next year or so, and secondly the head of the British Bankers’ Association warned that new banking rules [...]