The Barclays Libor fixing scandal is far from over as authorities continue with their probes. After CEO of the financial institution Bob Diamond gave testimony to the UK parliament's Treasury Select Committee (TSC) last week, Deputy Governor for the Bank of England (BOE) Paul Tucker and Barclays Chairman Marcus Agius were grilled next.
On Monday, Tucker testified in the TSC that the recent Libor probe disclosed a “cesspit” and proposed that regulators should check all benchmarks. "As well as looking at Libor, they should look at every single index that isn’t based on real transactions,” Tucker said. He claimed that he was not aware of any illegal benchmark rate fixing that has been going on before 2008. In contrast, Barclays' documents reveal that Libor and other key benchmarks have been manipulated from 2005 to 2009.
Agius for his part gave evidence which appeared to contradict some sections of Diamond's testimony. Agius told the TSC that BOE Governor Sir Mervyn King played a crucial role in Diamond's decision to resign last week, saying "it became clear that he (Bob) lost the support of his regulators." Agius also revealed he was cognizant of potential criminality issues regarding Libor rate fixing since early 2011.
Agius and Tucker's testimonies follow a long-running probe, which resulted in Barclays getting slapped by a record $452 million fine last month over Libor manipulation by UK's Financial Services Authority, US Department of Justice and US Commodity Futures Trading Commission. Barclays top three executives, Chief Executive Officer Bob Diamond, Chief Operating Officer Jerry del Missier and Chairman Agius, all resigned soon after the scandal broke out.
Meanwhile, regulators are continuing their sweep of banks, and Mitsubishi UFJ recently suspended two London-based traders in relation to the Libor manipulation probe. Both traders served at Rabobank for many years before joining M-UFJ, the biggest publicly traded bank in Japan.
Dutch lender Rabobank, along with Inter-dealer broker ICAP and at least a dozen banks including JPMorgan Chase, Citigroup, Deutsche Bank, Credit Suisse, Royal Bank of Scotland and UBS are also reportedly undergoing investigation.
On Monday (July 16), TSC will take further evidence from several position holders of the UK Financial Services Authority (FSA) and former Barclays COO del Missier on related issues.