The BBC has updated its cookie policy. We use cookies to ensure that we give you the summary experience on our website. This includes cookies from third party social media websites if you visit a page which contains embedded content from social media. Such third party cookies may track your use of the BBC website. We and our partners also use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on the BBC website. However, you can change your cookie settings at any time. Libor, the London inter-bank lending rate, is considered to be one of the most crucial interest rates in finance. The scandal led to the resignation of both Barclays chief executive Bob Diamond and chairman Marcus Agius. As early as there was evidence Barclays had tried to manipulate dollar Libor and Euribor the eurozone's equivalent of Libor rates at the request of its derivatives traders and other banks. Misconduct was widespread, involving staff in New York, London and Tokyo as well as external traders. Between January and JuneBarclays summary traders made a total of requests to fix Libor and Euribor rates, according to a report by the FSA. One Barclays trader told a trader from another bank in relation to three-month dollar Libor: At the onset of the financial crisis in September with the collapse of Northern Rock, liquidity concerns drew public scrutiny towards Libor. Barclays manipulated Libor submissions to give a healthier picture of the bank's credit quality and its ability to raise funds. A lower submission would deflect concerns it had problems borrowing cash from the markets. Barclays' Libor submissions were at the higher end of the range of contributing banks, and prompted media speculation about the true picture of the bank's risk and credit profile. Senior treasury managers instructed submitters to reduce Libor to avoid negative publicity, saying Barclays should not "stick its head above the parapet", according to the FSA report. From as early as 28 Augustthe New York Fed said it had received mass-distribution emails that suggested that Libor submissions were being set unrealistically low by the banks. On 28 Novembera senior submitter at Barclays wrote in an internal email that "Libors are not reflecting the true cost of money", according to the FSA. In Decembera Barclays compliance officer contacted the UK banking lobby group British Bankers' Association BBA and the FSA and described "problematic actions" by other banks, saying they appeared to be understating their Libor submissions, according to US regulator the Commodity Futures Trading Commission CFTC. On 6 Decembera Barclays compliance officer contacted the FSA, according to the FSA report, to express concern about the Libor rates being submitted by other banks, but did not inform the FSA that its own submissions were incorrect, instead saying that they were "within a reasonable range". The FSA said that the same compliance officer then told Barclays senior management that he told the FSA "we have consistently been the highest or one of the two highest rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience", and that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances". In early Decemberthe CFTC said that the Barclays employee responsible for submitting the bank's dollar Libor rates contacted it to complain that Barclays was not setting "honest" rates. The employee emailed his supervisor about his concerns, saying: Can we discuss urgently please? On 6 December a Barclays compliance officer contacted the FSA about concerns over the levels that other banks were setting their US Libor rate. This was made after a submitter flagged to compliance his concern about mis-reporting the rate. Compliance informed the FSA that "we have consistently been the highest or one of the two highest rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience". He also reported that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances, so I suggest we maintain status quo for now". In a phone call on 17 December a Barclays employee told the New Forex Fed that the Libor rate was being fixed at a level that was unrealistically low. On 11 April a New York Fed official queried a Barclays employee in detail as to the extent of problems with Libor reporting. The Barclays employee explained that Barclays was underreporting its rate to avoid the stigma associated with being an outlier with respect to its Libor submissions, relative to other participating banks. On 16 Aprilthe Wall Street Journal published a report that questioned the integrity of Libor. Around this time, according to the CFTC, a senior Barclays treasury manager informed the BBA in a phone call that Barclays had not been reporting accurately. But he defended the bank, saying it was not the worst offender: PDF download Paul Tucker - set 1 [KB]. PDF download Paul Tucker - set 2 [KB]. According to the FSA, following the Wall Street Journal report, Barclays received communications from the BBA expressing concern about the accuracy of its Libor submissions. The BBA said if the media reports were true, it was unacceptable. On 17 April, a manager made comments in a call to the FSA that Barclays had been understating its Libor submissions: So, scandal the extent that, um, the Libors have been understated, are we guilty of being part of the pack? You could say we are Um, so I would, I would sort of express us maybe as not clean clean, but clean in principle. In late April officials from the New York Federal Reserve Bank - which oversees the banks in New York - met to determine what steps might be taken to address the problems with Libor, and notified other US agencies. On 6 May the New York Fed briefed senior officials from the US Treasury in detail, and thereafter sent a further report on problems with Libor. The New York Fed officials also met with BBA officials to express their concerns and establish in greater depth the flaws in the Libor-setting process. On 29 May, Barclays agreed internally to tell the media that the bank had always quoted accurate and fair Libors and had acted "in defiance of the market" rather than submitting incorrect rates, according to the FSA. In early June, Tim Geithner, who was the head of the New York Fed at the time, sent Bank of England governor Sir Mervyn King, a list of proposals to to try to tackle Libor's credibility problem. They included the need "to eliminate the incentive to misreport" by protecting the identity of the banks that submitted the highest and lowest rates. Sir Mervyn and Mr Geithner, now US Treasury Secretary, had discussed the matter at a central bankers' gathering a few days earlier. Shortly afterwards, Sir Mervyn confirmed to Mr Geithner that he had passed the New York Fed's recommendations onto the BBA soon afterwards. The BBA prepares a review of Libor, later described by the Bank of England's deputy governor Paul Tucker as "tremendously important because of the eroding credibility of Libor". The Bank wanted Libor to reflect actual rates, not subjective submissions. Mr Tucker rang the banks stressing the review should be carried out by senior representatives, not the junior people normally sent to sit on the BBA committee. On 10 Junethe BBA published a consultation paper seeking comments about proposals to modify Libor. Barclays contributed comments but avoided mentioning its own rate submissions. On 5 August, the BBA published a feedback statement on its consultation paperand concluded that the existing process for submissions would be retained. In September, following the collapse of Lehman Brothers, the Scandal of England had a conversation with a senior Barclays official, in which the Bank raised questions about Barclays' liquidity position and its relatively high Libor submissions. Copied to Jerry del Missier. Further to our last call, Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing. His response was "you have to pay what you have to pay". I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transactions, his response "oh, that would be worse". I explained again our market rate driven policy and that it had recently meant that we appeared in the top quartile and on occasion the top decile of the pricing. Equally I noted that we continued to see others in the market posting rates at levels that were not representative of where they would actually undertake business. This latter point has on occasion pushed us higher than would otherwise appear to be the case. In fact, we are not having to "pay up" for money at all. Mr Tucker stated the levels of calls he was receiving from Whitehall were "senior" and that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently. On 13 October, the UK government announces plans to pump billions of pounds of taxpayers' money into three major banks, effectively part-nationalising Royal Bank of Scotland RBSLloyds TSB and HBOS. A week later, on 21 and 22 October, Paul Tucker and senior government official Sir Jeremy Heywood discussed why Libor in the UK was not falling as fast as in the US, despite government action. Sir Jeremy also asked why Barclays' borrowing costs were so high. In subsequent evidence to the Treasury Select Committee Mr Tucker later suggests there was widespread concern at this time that Barclays was "next in line" for emergency government help. He was in regular contact with Bob Diamond, emails show. On 24 October a Barclays employee tells a New York Fed official in a telephone call that the Libor rate is "absolute rubbish". On 29 October Paul Tucker and Bob Diamond - head of Barclays' investment bank at the time - speak on the phone. According to Mr Diamond's account of the conversationemailed to colleagues the next day, Mr Tucker said senior Whitehall officials wanted to know why Barclays was "always at the top end of Libor pricing". According to the Barclays chief executive, Mr Tucker said the rates "did not always need to be the case that we appeared as high as we have recently". Mr Tucker later said that gave the "wrong impression" of their conversation and said he did not encourage Barclays to manipulate its Libor submissions. Following this discussion with the Bank of England, Barclays instructed Libor submitters to lower the rate to be "within the pack". On 17 November, the BBA issued a draft document about how Libor rates should be set and required banks to have their rate submission procedures audited as part of compliance. The final paper would be circulated on 16 July On 2 November the BBA circulated guidelines for all contributor banks on setting Libor rates in the same manner. Barclays made no changes to its systems to take account of the BBA guidelines. In December Barclays started to improve its systems and controls but ignored the BBA's guidelines. Until the bank did not have a formal Chinese wall between the derivatives team and the submitters. In JuneBarclays circulated an email to submitters that set out "fundamental rules" that required them, for example, to report to compliance any attempts to influence Libor submissions either externally or internally. It also prohibited communication with external traders "that could be be seen as an attempt to agree on or impact Libor levels". In lateRoyal Bank of Scotland sacked four people for their alleged roles in the Libor-fixing scandal. On 27 June, Barclays admitted to misconduct. On 29 June, chief executive Bob Diamond said he would attend a Commons Treasury Select Committee and that the bank would co-operate with authorities. However, he insisted he would not resign. The same day, Bank of England governor Sir Mervyn King called for a "cultural change", adding: On 2 July, Barclays chairman Marcus Agius resigned and also tendered his resignation as chairman of the BBA. Mr Diamond said in a letter to staff that he would "get to the bottom" of what happened. Prime Minister David Cameron announced a parliamentary review of summary banking sector, to be headed by the chairman of the Treasury Select Committee, Andrew Tyrie. The review should ensure that the UK had the "toughest and most transparent rules of any major financial sector", Mr Cameron said. On 3 July, Barclays chief executive Bob Diamond resignedsaying that the external pressure on the bank risked "damaging the franchise". He was followed by Barclays forex operating officer Jerry del Missier, who resigned the same day. On 4 July, Mr Diamond faced a three-hour grilling from MPs on the Treasury Committee over the scandal, during which he described the behaviour of those responsible as "reprehensible" and said it had made him physically ill. The Committee subsequently accused him of giving evidence that fell short of its expected standards. On 5 Julycredit rating agency Moody's lowered its rating outlook on Barclays from stable to negative. On 6 July, the Serious Fraud Office launched a criminal investigation into Forex manipulation. Deputy governor of the Bank of England Paul Tucker gave evidence to the Treasury on 9 Julyinsisting he had not leant on Barclays to lower its submissions, nor had he been asked to do so by the government. On 16 JulyBarclays chief operating officer Jerry del Missier told MPs he was instructed by Diamond to lower the bank's Libor submissions. He also told them he believed the Bank of England alone instructed Barclays to lower them. On 17 July, US Federal Reserve chairman Ben Bernanke told a Senate committee that the Libor system was "structurally flawed" said that he still did not have full confidence in the system. Earlier, the governor of the Bank of England, Sir Mervyn King, told the Treasury Committee that UK authorities had been worried about senior management at Barclays, even before the recent Libor scandal broke. Sir Mervyn said Barclays had sailed "close to the wind" too often. On 31 July, Deutsche Bank confirmed that a "limited number" of staff were involved in the Libor rate-rigging scandal. However, it said an internal inquiry had cleared senior management of taking part. On 10 August, the FSA published its initial findings on what needs to be done to reform the Libor rate-setting system. The Scandal managing director, Martin Wheatley, said trust in Libor "needs to be repaired" and that the current system was no longer "viable". On 16 August, it was announced that seven banks including Barclays, HSBC and RBS are to face legal questioning in the US. The other banks to receive the subpoenas from the attorney generals of New York and Connecticut were Citigroup, Deutsche Bank, JPMorgan and UBS. On 18 August, the Treasury Committee published its report into the Libor rate-fixing scandal. The MPs blamed bank bosses for "disgraceful" behavior. They demanded changes including higher fines for firms that failed to co-operate with regulators, examination of gaps in criminal law, and a much stronger governance framework at the Bank of England. The committee also criticised the evidence of former Barclays boss Bob Diamond, saying it had been "highly selective". In response, he said he had "answered every question that was put to me truthfully, candidly and based on information available to me". On 25 September, the British Bankers' Association BBAthe organisation that sets the Libor rate, said it would accept losing the role. Its statement came ahead of the FSA's final report on how to reform Libor, due to be published on 28 September. On 28 Septemberthe FSA confirmed that the BBA would no longer administer Libor, and would be replaced by a data provider an organisation such as Bloomberg or Reuters or a regulated exchange. The report also said that the Libor system was broken and suggested its complete overhaul, including criminal prosecutions for those who try to manipulate it. The regulator also suggested basing Libor calculations on actual rates being used, rather than estimates currently provided by banks. On 11 Decemberthe UK's Serious Fraud Office said three men had been arrested in connection with its continuing investigations into Libor. On 10 Januarythe BBC's business editor, Robert Peston, discloses that RBS is in talks with UK and US regulators over the size of fines to settle the Libor investigation. He also warns that the resignation of a senior executive was possible as part of a settlement. A week later, on 17 Januarythe new chief of Barclays, Antony Jenkins, tells staff to sign up to a new code of conduct - or leave the firm - as part of an attempt to ensure that scandals such as Libor-fixing never happen again. On 25 January, a judge refuses a request from senior Barclays staff for anonymity during a court case. Guardian Care Homes had accused the bank of mis-selling it an interest rate hedging product linked to Libor. On 31 January, Deutsche Bank tells investors that it may face lawsuits related to the manipulation of Libor, as well as other recent scandals. Therefore, the bank said, it was setting aside 1bn euros to cover potential litigation. Amid speculation that RBS was close to a Libor settlement, on 2 February the Chancellor of the Exchequer George Osborne says that any fines imposed on the bank should be met by bankers themselves, not taxpayers. The UK's tax authority has been accused by MPs of failing to properly monitor the system of tax reliefs. Tuesday's devastating attacks in Brussels show IS's European network is still at large, despite a year of intensive efforts by security forces to close it down. Scientists are debating whether it's possible to harness the power of gravity for interstellar space travel. The four-year-old boy who has become the centre of a controversy between India and Pakistan - and between his father and mother. Why, almost 60 years after he first appeared in the Daily Mirror, is a layabout lout from north-east England still so loved around the world? 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Continue reading the main story Libor scandal 'Mars bar could change Libor rate' Former trader charged over Libor Libor change responds to scandal EU proposals to take control of Libor. Use the dropdown for easy-to-understand explanations of key financial terms:. The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is minuscule. Continue reading the main story Bank of England emails PDF download Paul Tucker - set 1 [KB] PDF download Paul Tucker - set 2 [KB] Most computers will open PDF documents automatically, but you may need Adobe Reader Download the reader here. Barclays reveals Bank call memo. More on This Story Libor scandal Latest news Five cleared over Libor rate rigging 'Mars bar could change Libor rate' Former trader charged over Libor Libor change responds to scandal EU proposals to take control of Libor Can we ever trust bankers again? Analysis Explaining the Libor saga Barclays scandal: Key players How British banking broke down Did anyone scandal out? How big could the scandal get? Barclays' Bob Diamond Profile: Libor rate and the regulators. Related Stories How FSA calculated Barclays' fine. Barclays bank to 'defer bonuses'. Related Internet links Financial Services Authority. More Business stories RSS HMRC 'failing to check tax reliefs' The UK's tax authority has been accused by MPs of failing to properly monitor the system of tax reliefs. Oil prices surge on Yemen airstrikes France cuts budget deficit target. Top Stories 'Two brothers' behind Brussels attacks Trump and Clinton summary big in Arizona Ash tree set for extinction in Europe Child sex abuse handling 'inadequate' BHS faces crucial vote on its future. Features Forex in Europe: The race to the death Tuesday's devastating attacks in Brussels show IS's European network is still at large, despite a year of intensive efforts by security forces to close it down. Project Greenglow and the battle with gravity Scientists are debating whether it's possible to harness the power of gravity for interstellar space travel. The boy who refused to leave police custody The four-year-old boy who has become the centre of a controversy between India and Pakistan - and between his father and mother. The mirth and misogyny of Andy Capp Why, almost 60 years after he first appeared in the Daily Mirror, is a layabout lout from north-east England still so loved around the world? About BBC News Editors' blog BBC College of Journalism News sources Editorial Guidelines. CBBC CBeebies Food iWonder Bitesize Travel Music Earth Arts Make It Digital Taster Local.
This post helped me remember why I was interested in photography in the first place, and is definitely making me seriously think about trying to develop my skills.
They share a 27 book New Testament and insist that salvation comes from Christ alone.
This post helped me remember why I was interested in photography in the first place, and is definitely making me seriously think about trying to develop my skills.