TIMELINE-Libor: The road to scandal
Aug 9 (Reuters) - Libor, the London interbank offered rate, is the global benchmark for interest rates on everything from credit cards to trillions of dollars in financial derivatives and is at the heart of a global scandal over rate rigging.
Libor rates are based on daily estimates from a group of banks as to how much they would expect to pay to borrow funds from each other for a range of currencies and periods.
Below is a timeline of Libor and the scandal.
1969 - An $80 million loan for the Shah of Iran becomes one of the first pegged to a benchmark set by the group of bankers behind the deal. They call it a London interbank offered rate.
1986 - British Bankers Association publishes first official Libor rates in U.S. Dollars, Yen and Sterling, meeting demand for global benchmarks from fast growing financial markets.
1991 - BBA directors ask some Japanese banks to lower their Libor submissions amid worries that Japanese funding concerns due to a local crisis could spread to the wider market.
2007 - Barclays alerts U.S. regulators about its concerns that other banks are submitting dishonestly low interbank rates.
June 2008 - U.S. Treasury Secretary Timothy Geithner, then head of the New York Fed, raises concerns over Libor with the Bank of England, which passes the message to the BBA.
Sept. 2008 - Libor rates spike after the collapse of Lehman Brothers at the height of the global financial crisis. Rate setting at the time is central to investigations of rigging.
2010 - Britain's Financial Services Authority launches an investigation into Barclays as part of a global probe into the industry over allegations of manipulation.
Aug. 2011 - Discount brokerage and money manager Charles Schwab Corp files lawsuits accusing 11 major banks of conspiring to manipulate Libor.
June 2012 - Barclays fined $455 million in a settlement with U.S. and British regulators over rigging rates. Britain announces a review of the way Libor is calculated.
July 2012 - Barclays CEO Bob Diamond and chairman Marcus Agius quit over the scandal. Agius keeps a caretaker role. Class action brought against Barclays and other banks over rigging.
Aug. 2012 - Royal Bank of Scotland confirms it has dismissed staff over the scandal. Bank of England governor Mervyn King says Libor has ceased to work.
Thomson Reuters, parent company of Reuters, has been calculating and distributing the rates for the BBA since 2005, when it acquired previous calculating agent Telerate.
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