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| Barclays: Cameron says bank faces 'serious questions' | Barclays: Cameron says bank faces 'serious questions' |
| (about 1 hour later) | |
| Prime minister David Cameron has said that Barclays Bank management has "serious questions" to answer over how it manipulated banking lending rates. | Prime minister David Cameron has said that Barclays Bank management has "serious questions" to answer over how it manipulated banking lending rates. |
| Barclays was fined £290m ($450m) after an investigation into claims that several banks manipulated the Libor rate at which they lend to each other. | Barclays was fined £290m ($450m) after an investigation into claims that several banks manipulated the Libor rate at which they lend to each other. |
| The comments came as former Barclays boss Martin Taylor said the bank had engaged in "systematic dishonesty". | |
| As the pressure increased, Barclays shares fell 15% during the morning. | |
| The bank had acknowledged on Wednesday that its actions had fallen "well short of standards". | |
| Other banks are still being investigated by UK and US regulators about their role in the affair. | Other banks are still being investigated by UK and US regulators about their role in the affair. |
| Mr Cameron said "the whole management team have got some serious questions to answer. Let them answer those questions first. | |
| "Who was responsible? Who was going to take responsibility? How are they being held accountable?" | "Who was responsible? Who was going to take responsibility? How are they being held accountable?" |
| In a statement to the House of Commons, Chancellor George Osborne said: "The FSA report is a shocking indictment of the culture at banks like Barclays in the run-up to the financial crisis." | |
| "Through 2005, 2006 and early 2007 we see evidence of systematic greed at the expense of financial integrity and stability and they knew what they were doing," he said. | |
| Labour party leader, Ed Miliband, said: "This cannot be about a slap on the wrist." | Labour party leader, Ed Miliband, said: "This cannot be about a slap on the wrist." |
| "The people that have done the wrong thing in this case should face the full force of the law... including criminal prosecutions." | "The people that have done the wrong thing in this case should face the full force of the law... including criminal prosecutions." |
| Regulators say that Barclays manipulated interest rates at which banks loan to each other to benefit their traders and financial status. | Regulators say that Barclays manipulated interest rates at which banks loan to each other to benefit their traders and financial status. |
| Mr Taylor said that Barclays' deception looks like a deliberate strategy as it had been going on for years. | Mr Taylor said that Barclays' deception looks like a deliberate strategy as it had been going on for years. |
| Tracey McDermott, director of enforcement at the FSA, which imposed fines alongside the US financial regulator, told the BBC: "We have a number of investigations that are ongoing. | Tracey McDermott, director of enforcement at the FSA, which imposed fines alongside the US financial regulator, told the BBC: "We have a number of investigations that are ongoing. |
| "Obviously we need to look at each case on its own particular facts but the initial indications are that Barclays was not the only firm that was involved in this." | "Obviously we need to look at each case on its own particular facts but the initial indications are that Barclays was not the only firm that was involved in this." |
| The US Department of Justice also said criminal investigations into "other financial institutions and individuals" were ongoing. | The US Department of Justice also said criminal investigations into "other financial institutions and individuals" were ongoing. |
| Other big names believed to be under investigation include Citigroup, JP Morgan, Deutsche Bank, HSBC and Royal Bank of Scotland. | Other big names believed to be under investigation include Citigroup, JP Morgan, Deutsche Bank, HSBC and Royal Bank of Scotland. |
| The scandal is putting pressure on Mr Diamond. | The scandal is putting pressure on Mr Diamond. |
| Mr Taylor, who was chief executive of Barclays from 1994 to 1998, said: "It's hard to believe that a policy which seems to be so systematic was not known by people at or very near the top of the bank." | Mr Taylor, who was chief executive of Barclays from 1994 to 1998, said: "It's hard to believe that a policy which seems to be so systematic was not known by people at or very near the top of the bank." |
| Former City minister Lord Myners told the BBC that the people at the top should take responsibility. | Former City minister Lord Myners told the BBC that the people at the top should take responsibility. |
| The Liberal Democrat peer, Lord Oakeshott, said that if Mr Diamond had any shame, he would resign. | The Liberal Democrat peer, Lord Oakeshott, said that if Mr Diamond had any shame, he would resign. |
| Barclays has said its actions "fell well short of standards". | Barclays has said its actions "fell well short of standards". |
| In response, chief executive Bob Diamond and three other top executives at the bank are to give up their bonuses this year. | In response, chief executive Bob Diamond and three other top executives at the bank are to give up their bonuses this year. |
| Investigators say that Barclays' traders lied to make the bank look more secure during the financial crisis and, sometimes - working with traders at other banks - to make a profit. | Investigators say that Barclays' traders lied to make the bank look more secure during the financial crisis and, sometimes - working with traders at other banks - to make a profit. |
| Mortgage deals | Mortgage deals |
| Barclays has admitted that a group of traders lied about what it was costing the bank to borrow. | Barclays has admitted that a group of traders lied about what it was costing the bank to borrow. |
| Now, why does this matter? | Now, why does this matter? |
| It matters because lots and lots of deals involving clients of Barclays used the interest rate into which Barclays was feeding this information, about its own borrowing costs, to determine the profit and loss on their own deals. | It matters because lots and lots of deals involving clients of Barclays used the interest rate into which Barclays was feeding this information, about its own borrowing costs, to determine the profit and loss on their own deals. |
| It's quite hard to think of behaviour by a bank as shocking as this: not telling the truth about what it is costing you to borrow, that then becomes a benchmark for pricing other deals. | It's quite hard to think of behaviour by a bank as shocking as this: not telling the truth about what it is costing you to borrow, that then becomes a benchmark for pricing other deals. |
| The statement from the US regulator, which levied a big chunk of the fine, talks about how Barclays was working with other banks to try to fix this interest rate. | The statement from the US regulator, which levied a big chunk of the fine, talks about how Barclays was working with other banks to try to fix this interest rate. |
| This of course implies that Barclays is simply the first bank to settle and we will see fines and punishments against some of the other big banks of the world. | This of course implies that Barclays is simply the first bank to settle and we will see fines and punishments against some of the other big banks of the world. |
| Barclays' misconduct relates to the daily setting of the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). | Barclays' misconduct relates to the daily setting of the London Interbank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor). |
| These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial deals between banks and other institutions. | These are two of the most important interest rates in the global financial markets and directly influence the value of trillions of dollars of financial deals between banks and other institutions. |
| They can also affect lending rates to the public, for instance with some mortgage deals. | They can also affect lending rates to the public, for instance with some mortgage deals. |
| It is not yet clear whether Barclays staff actually succeeded in manipulating the interest rates to the bank's advantage and therefore whether it had any impact on borrowers. | It is not yet clear whether Barclays staff actually succeeded in manipulating the interest rates to the bank's advantage and therefore whether it had any impact on borrowers. |
| While the FSA said only that the Barclays employees had attempted to do so, the US Department of Justice said that on some occasions they did affect the Libor and Euribor rates. | While the FSA said only that the Barclays employees had attempted to do so, the US Department of Justice said that on some occasions they did affect the Libor and Euribor rates. |
| The British Bankers Association asked the government on Thursday to consider taking over the regulation of how Libor is set. | |
| Former City minister Lord Myners told the BBC that the people at the top should take responsibility for "a complete cultural failure". | Former City minister Lord Myners told the BBC that the people at the top should take responsibility for "a complete cultural failure". |
| He said the behaviour of Barclays staff was the worst he had seen. | He said the behaviour of Barclays staff was the worst he had seen. |
| "This is the most corrosive failure of moral behaviour I have seen in a major UK financial institution in my career," he said. | "This is the most corrosive failure of moral behaviour I have seen in a major UK financial institution in my career," he said. |
| "I think fines and public criticism will not stop these behaviours. These behaviours will not stop until the people perpetrating it or responsible for overseeing them face the prospect of criminal charges and the prospect of going to jail." | "I think fines and public criticism will not stop these behaviours. These behaviours will not stop until the people perpetrating it or responsible for overseeing them face the prospect of criminal charges and the prospect of going to jail." |
| The former Liberal Democrat Treasury spokesman, Lord Oakeshott said: "If Bob Diamond had a scintilla of shame he would resign." | The former Liberal Democrat Treasury spokesman, Lord Oakeshott said: "If Bob Diamond had a scintilla of shame he would resign." |
| "If Barclays' board had an inch of backbone between them they would sack him," he said. | "If Barclays' board had an inch of backbone between them they would sack him," he said. |
| Andrew Tyrie, chairman of the Commons treasury committee, said it would summon Mr Diamond to account for what had happened. | Andrew Tyrie, chairman of the Commons treasury committee, said it would summon Mr Diamond to account for what had happened. |
| 'Accepted culture' | 'Accepted culture' |
| The fine imposed on Barclays is part of an international investigation into the setting of interbank rates between 2005 and 2009. | The fine imposed on Barclays is part of an international investigation into the setting of interbank rates between 2005 and 2009. |
| Each day the British Bankers' Association (BBA) and the European Banking Association publish the the Libor and Euribor rates by taking an average of the estimated rates submitted to them by leading banks. | Each day the British Bankers' Association (BBA) and the European Banking Association publish the the Libor and Euribor rates by taking an average of the estimated rates submitted to them by leading banks. |
| Between 2005 and 2008, the Barclays staff who submitted estimates of their own interbank lending rates were frequently lobbied by its derivatives traders to put in figures which would benefit their trading positions, in order to produce a profit for the bank. | Between 2005 and 2008, the Barclays staff who submitted estimates of their own interbank lending rates were frequently lobbied by its derivatives traders to put in figures which would benefit their trading positions, in order to produce a profit for the bank. |
| And between 2007 and 2009, during the height of the banking crisis, the staff put in artificially low figures, to avoid the suspicion that Barclays was under financial stress and thus having to borrow at noticeably higher rates than its competitors. | And between 2007 and 2009, during the height of the banking crisis, the staff put in artificially low figures, to avoid the suspicion that Barclays was under financial stress and thus having to borrow at noticeably higher rates than its competitors. |
| The FSA pointed out that Barclays traders were quite open about their routine attempts to lobby their colleagues who submitted the bank's estimate of its borrowing costs to the BBA. | The FSA pointed out that Barclays traders were quite open about their routine attempts to lobby their colleagues who submitted the bank's estimate of its borrowing costs to the BBA. |
| It was particularly concerned because it appeared to be "accepted culture" among some staff. | It was particularly concerned because it appeared to be "accepted culture" among some staff. |
| "Requests to Barclays' submitters were made verbally and a large amount of email and instant message evidence consisting of derivatives traders' requests also exists," the FSA said. | "Requests to Barclays' submitters were made verbally and a large amount of email and instant message evidence consisting of derivatives traders' requests also exists," the FSA said. |
| In one instance, a trader recounted a conversation in which he had "begged" the submitter to put in a lower Libor figure. | In one instance, a trader recounted a conversation in which he had "begged" the submitter to put in a lower Libor figure. |
| "I'm like, dude, you're killing us," he said. His manager replied, "just tell him to... put it low". | "I'm like, dude, you're killing us," he said. His manager replied, "just tell him to... put it low". |
| In turn, the staff submitting the data would respond to the traders' requests. | In turn, the staff submitting the data would respond to the traders' requests. |
| "For you…anything," said one. "Done… for you big boy," said another. | "For you…anything," said one. "Done… for you big boy," said another. |
| And: "I owe you big time... I'm opening a bottle of Bollinger." | And: "I owe you big time... I'm opening a bottle of Bollinger." |