FSA fines bank £59.5m following LIBOR and EURIBOR investigation – The FSA has fined Barclays Bank Plc (Barclays) £59.5m (including a 30% discount) for misconduct in its submissions for the setting of the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR).

In breach of Principle 2 (reasonable skill and care), Principle 3 (systems and controls) and Principle 5 (proper standard of market conduct) of the FSA Principles for Businesses, Barclays:

1. • made submissions to form part of the LIBOR and EURIBOR rate setting process, taking into account interest rate requests from its derivative traders;
2. • sought to influence the EURIBOR submissions of other banks in the rate setting process; and,
3. • did not have adequate systems and controls in place relating to its LIBOR and EURIBOR submissions processes until June 2010, despite issues raised with compliance earlier than this.

Barclays’ breaches involved a significant number of employees and occurred over a number of years. The FSA notes that Barclays did fully cooperate with the FSA’s investigation.

This is an example of increasingly common mutual assistance between regulators in a cross-border investigation. The FSA cooperated with overseas authorities, including the US Commodities and Futures Trading Commission (CFTC), the US Securities and Exchange Commission, the US Department of Justice (DJ) and the US Federal Board of Investigation, in this cross-border investigation. The bank has agreed to pay US$200 million to the CFTC and US$160 million to the DJ in settlement of similar charges.

Copies of Barclays’ final notice; FSA press release; CFTC press release; and US DJ are available.

• http://www.fsa.gov.uk/static/pubs/final/barclays-jun12.pdf
• http://www.fsa.gov.uk/library/communication/pr/2012/070.shtml
• http://www.cftc.gov/PressRoom/PressReleases/pr6289-12
• http://www.justice.gov/opa/pr/2012/June/12-crm-815.html