On Wednesday here we reported that the British bank Barclays PLC (NYSE:BCS) (LON:BARC) had agreed to pay a $450 million settlement from a long U.S. and the UK government regulator investigation of data manipulation by the bank; they had tried to influence the Libor rate.
Regulators determined these actions took place, beginning in 2005. Helping their case was a review of emails between Barclays (known as submitters) and traders. Certain rate requests had been submitted by traders, followed by a figure suggested by Barclays.
Needless to say, traders benefited from the fixed and faux rates.
Vanguard’s move into PE may change the landscape forever
Private equity has been growing in popularity in recent years as more and more big-name funds and institutional investors dive in. Now even indexing giant Vanguard is out to take a piece of the PE pie. During a panel at the Morningstar Investment Conference this year, Fran Kinniry of Vanguard, John Rekenthaler of Morningstar and Read More
With Wednesday’s settlement came the release of damaging emails. Traders’ rate requests came through emails and it appears copies had been retained. The media is having a field day with the emails and on Thursday, the Wall Street Journal shared a few with its readers.
Take a look at these from the UK’s review (the Financial Services Authority)
Submitter: “Hi All, Just as an FYI, I will be in noon’ish on Monday […]”.
Trader B: “Noonish? Who’s going to put my low fixings in? hehehe”
Submitter: “[…] [X or Y] will be here if you have any requests for the fixings.”
Friday, March 10, 2006
Two US dollar Derivatives Traders made email requests for a low three-month US dollar LIBOR submission for the coming Monday:
Trader C: “We have an unbelievably large set on Monday (the IMM). We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help”;
Trader B: “I really need a very very low 3m fixing on Monday – preferably we get kicked out. We have about 80 yards [billion] fixing for the desk and each 0.1 [one basis point] lower in the fix is a huge help for us. So 4.90 or lower would be fantastic.”
Monday, March 13, 2006
Trader C: “The big day [has] arrived… My NYK are screaming at me about an unchanged 3m libor. As always, any help wd be greatly appreciated. What do you think you’ll go for 3m?”
Submitter: “I am going 90 altho 91 is what I should be posting”.
Trader C: “[…] when I retire and write a book about this business your name will be written in golden letters […]”.
Submitter: “I would prefer this [to] not be in any book!”
From the U.S. review (Commodities Futures Trading Commission)
September 13, 2006: Senior trader in New York to submitter:
“Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.”
December 14, 2006: Trader in New York to submitter:
“For Monday we are very long 3m cash here in NY and would like the setting to be set as low as possible … thanks”
March 20, 2006:
“Submitter’s response to a request: ”Always happy to help, leave it with me, Sir.”