Comments on: Defiant Barclays http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Doly http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41281 Thu, 05 Jul 2012 22:32:25 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41281 Cynical me wonders what is really going on here. OK, Barclays manipulated LIBOR rates. And why is this coming up right now? Barclays aren’t innocent, but they can still be entirely correct in saying that other people are just as guilty. And if that is the case, the Bank of England is probably aware of this. So, why does somebody want with a passion to get Bob Diamond out of the way right now?

As for what really happened with the phone conversation, this sounds like typical plausible deniability from the top. Paul Tucker said something like “it did not always need to be the case that Barclays appeared as high” according to somebody “senior”. (You have to wonder who is so “senior” at such levels that they can’t even be identified.) Bob Diamond “did not believe he received an instruction from Paul Tucker or that he gave an instruction to Jerry del Missier.” I’m sure that Jerry del Missier conveyed effectively to his subordinates that certain things might be desirable, without actually telling them to do it. When people at the top want something done that happens to be illegal, as it’s said above, they don’t write a memo saying “Please fix LIBOR, in contravention of section X of act such-and-such”. Of course they say something that might sound like they didn’t mean at all to break the law. You don’t get to the top if you are a complete idiot, and only a complete idiot would do that.

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By: vincentjohn http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41271 Thu, 05 Jul 2012 20:01:20 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41271 You are right to say the fine has been imposed and that is that.Barclays fiddled the Libor figures and have to take the wrap.The fact that other banks were doing this too is not relevant.If I get a speeding ticket for doing 85 mph I can hardly use the defense that I was less guilty because others passed me doing 90 mph.

Most of the other CEOs at the other banks have gone now too,so that will likely be the end of heads rolling.Though no bank will ever get over the loss of trust the public now has in them.

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41258 Thu, 05 Jul 2012 18:26:25 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41258 I come down on the side of what I’ll describe as the combined position of @Splitorff/BBC, The Epicurean Dealmaker, and Matt Levine at Dealbreaker. I agree that the pre-crisis manipulation by Barclays had nothing to do with the BofE and feel strongly that Tucker knew exactly what he was saying on October 29, 2008, and that it meant “Barclays, lower your LIBOR submission”. I can also see how a central banker could easily think that this was OK, especially during a crisis: manipulating short-term interest rates is what central banks do every day.

Re the pre-crisis manipulation of LIBOR, the BBA deliberately excludes the several highest and lowest LIBOR submissions in an attempt to make such manipulation harder. Doesn’t that suggest that the traders at Barclays trying to move LIBOR had contacts at other banks to make sure it would work? I expect that the ongoing investigations of other banks will find similar behavior elsewhere.

Re LIBOR being a “made-up” number during the crisis, I believe that was the case pre-crisis as well. While in normal times there might be a market basis for the overnight LIBOR, my understanding is that 1-month, 3-month, 6-month, and 1-year LIBOR were largely or completely estimates well before the crisis since there was little if any unsecured interbank lending in those maturities. These estimates might have been a little better because they applied a yield curve to a real overnight LIBOR number, but they still weren’t actual market numbers.

Lastly, LIBOR is hardly alone in being a basically “made-up” rate that impacts lots of loans. The “Prime Rate” isn’t tied to any real market measure. It usually moves with the Fed Funds Rate but doesn’t have to do so. At this point it has no real definition – banks just state “x% is our Prime Rate”. It’s not as widely used as LIBOR, but lots of small business loans, credit cards, ARM’s, and HELOC’s are indexed to the Prime Rate.

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By: krimsonpage http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41245 Thu, 05 Jul 2012 16:32:55 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41245 A cornered beast will always bite back hard. Time to finish this thing off and send a few limeys to jail.

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By: FifthDecade http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41238 Thu, 05 Jul 2012 15:57:47 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41238 @fresnodan Sorry mate, you’re a bit off kilter there.The US Fed may be owned by your banks, but the BoE is a govt institution run by career civil servants. What they are after is stability; change actually makes them do something, it’s unpredictable, and they like to have all the answers before the questions come up.

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By: fresnodan http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41213 Thu, 05 Jul 2012 09:50:44 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41213 Salmon is part of the old guard journalism that still seems to believe that central banks are not of the banks, by the banks, and for the banks – now I agree that Barclays is a bank and therefore Satan’s minion.

But you can’t have a brain and not realize that the BoE (Bank of England – just like our FED) is the LEADER of Satan’s angels, if not Satan himself.
All these central banks do is bail out their children, the private banks. They refuse to enforce banking laws, and they refuse to regulate effectively. ALL they want to do is save banks (which the MARKET has shown are run by frauds and incompetents – and if we had a competent and honorable DoJ, criminals as well) – and of course, this means manipulating interest rates as well. Do you expect a memo from BoE stating “you are required to manipulate LIBOR contrarty to section (applicable law)?”

Of course the BoE, as well as the FED will do ANYTHING to save banks. They think that what is good for the banks is…well, good for the banks and f*ck everybody else.

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By: hcm1 http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41183 Wed, 04 Jul 2012 16:31:59 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41183 another possibility is that the bank of england was telling diamond in the nicest possible way that the rates that Barclays was reporting appeared to be unrealistically high, i.e. higher than actual market conditions would justify. If I am not mistaken about ten or twelve years back there were allegations that certain traders in oil and/or gasoline were doing this to Platt’s quotations for non exchange traded grades. Those quotaes were also based on surveys of market participants.

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By: scythe http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41169 Wed, 04 Jul 2012 13:14:06 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41169 (quote) “And yet the corrupt Barclays operation, including Jerry del Missier, reckoned that it would be easier to just go back to their old sordid ways, and nobble the Libor fixings instead.”

the published emails fingered barclay’s corruption and its gratuitous kiss-butting favours for the “big boy” insiders

time to look forward to the ECB’s new Target2Securities platform

and away from those LIBORious snakes

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By: MrRFox http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41167 Wed, 04 Jul 2012 11:34:27 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41167 Is it not obvious that the entire BoE episode is but a smokescreen by Barclays’ to avoid/mitigate scrutiny of its flagrantly self-serving manipulation of Libor in the years prior to the crisis?

If Diamond goes down for conspiracy, his conviction will have nothing to do with anything concerning the BoE’s desire to calm markets during the period of turmoil. Embarrassing the Bank is Barclays’ attempt at creating a Mexican-standoff situation, in an effort to avoid criminal prosecution. It might work.

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By: FifthDecade http://blogs.reuters.com/felix-salmon/2012/07/03/defiant-barclays/comment-page-1/#comment-41166 Wed, 04 Jul 2012 11:00:32 +0000 http://blogs.reuters.com/felix-salmon/?p=15770#comment-41166 We really can’t take Diamond’s note at face value; I’ve sat on many committees and found the minutes ended up suiting the needs of the Secretary of the Organisation, and had only a passing resemblance to what actually happened or was in reality said. That’s because people tend to only remember the bits they want to hear. However, as Confucious said “The faintest ink lasts longer than the strongest memory”.

Of course, as a Civil Service organisation, the BoE will almost certainly have notes about everything; bureaucrats are like that. They also don’t easily publish their notes in the press… their job is to keep secrets, not to broadcast them.

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