Feb 6 Libor, the London interbank offered rate,
is a global benchmark for interest rates on everything from
credit cards to trillions of dollars in financial derivatives
and is at the heart of a 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. The
British Bankers' Association (BBA) published the first official
Libor rates in dollars, sterling and yen, meeting demand for
global benchmarks from financial markets in 1986.
This is how the scandal unfolded.
2007 - Barclays alerts U.S. regulators to its
concerns that other banks are submitting dishonestly low
Sept. 2008 - Libor rates spike after the collapse of Lehman
Brothers at the height of the global financial crisis.
2010 - Britain's Financial Services Authority (FSA) launches
an investigation into Barclays as part of a global probe of
alleged interest rate 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 is fined $450 million in a settlement
with U.S. and British regulators over rate rigging. Britain
announces a review of the way Libor is calculated. Barclays
chief executive Bob Diamond and chairman Marcus Agius quit in
the next month over the scandal.
Aug. 2012 - A joint New York-Connecticut investigation of
Libor sends subpoenas to Royal Bank of Scotland, HSBC
Holdings, JPMorgan, Deutsche Bank,
Barclays, UBS and Citigroup. The subpoenas seek
communication between executives related to possible collusion
that may have played a role in alleged rate manipulation.
Sept. 2012 - Britain's FSA delivers a 10-point plan to
overhaul Libor on Sept. 28, but stops short of scrapping the
benchmark interest rate.
Nov. 2012 - Deutsche Bank faces sceptical German lawmakers
who are seeking answers about how banks manipulated global
benchmark rates. On the same day, Barclays says it fired five
employees following its investigations into Libor rigging.
Dec. 2012 - UBS is fined $1.5 billion to settle charges of
rigging Libor. U.S. prosecutors also charged two former UBS
traders - Tom Hayes and Roger Darin - with taking part in the
manipulation, making them the first individuals to be criminally
accused. UBS's Japanese subsidiary also pleaded guilty to one
U.S. criminal count of fraud relating to manipulation of
Feb 2013 - Royal Bank of Scotland (RBS) is fined
$612 million for its role in the global rate-rigging scandal.
Manipulation of the rate by RBS occurred from at least 2006
until late 2010, after the bank was bailed out. John Hourican,
head of RBS's investment bank, will leave at the end of April
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.