11/09/2012
BIS creates a Libor working group
The Bank for International Settlements (BIS) has decided to create a working group to examine Libor, following the discovery of several manipulations of inter-bank lending rates, particularly the Euribor and Libor rates, it has announced in a brief statement released on 10 September. “The governors of the BIS have agreed to create a group of top heads to examine the case and to consult the market to contribute to the debate coordinated by the Financial Stability council,” Mervyn King, governor of the Bank of England (BoE), says in the statement. The Libor scandal broke on 27 June, when the British bank Barclays revealed that it would pay about EUR360m to settle investigations by British and American regulators over a scandal involving manipulation of the British Libor and European Euribor inter-bank lending rates. Since then, the Libor scandal has widened to include other banks, and investigations have been opened in several countries. In the United States, the state of New York has subpoenaed seven banks, including JPMorgan Chase and Barclays, as part of their investigations of manipulations of the interest rates that make up the Libor. Citi, UBS, HSBC, RBS and Deutsche Bank are also among the banks that prosecutors in the two states have contacted for documents in their investigaton. The European Commission, meanwhile, on 5 September launched a consultation to determine whether it need to legislate on the composition of indices used as a basis for contracts, including financial contracts, in the wake of the Libor scandal.
