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Barclays will pay states $100 million for LIBOR manipulation

Joe Mont | August 12, 2016

Barclays Bank PLC and Barclays Capital Inc. will pay $100 million as part of a 44-state settlement “for fraudulent and anticompetitive conduct” involving the manipulation of U.S. Dollar, LIBOR (the London Interbank Offered Rate), and other benchmark interest rates.

During the relevant time period, a panel of 16 banks made LIBOR submissions that were supposed to reflect borrowing rates in the interbank market; a daily LIBOR rate was calculated by averaging the middle eight submissions.

During the financial crisis, from 2007-2009, Barclays managers told LIBOR submitters to lower their LIBOR settings to avoid the appearance that it was in financial difficulty and needed to pay more than some of its competitors to borrow money. The LIBOR submitters complied with the instructions. Also, from 2005 to 2007 and continuing at least into 2009, Barclays’ traders occasionally asked Barclays’ LIBOR submitters to change LIBOR settings in order to benefit their positions.

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