Dec 19 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.
This is how the scandal unfolded.
1986 - The British Bankers' Association (BBA) publishes the
first official Libor rates in dollars, sterling and yen, meeting
demand for global benchmarks from financial markets.
2007 - Barclays alerts U.S. regulators about 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. Rate
setting at the time is central to investigations of rigging.
2010 - Britain's Financial Services Authority (FSA) launches
an investigation into Barclays as part of a global probe into
the industry over allegations of 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 $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 chief executive Bob Diamond and
chairman Marcus Agius quit over the scandal. Agius keeps a
caretaker role. Class action is brought by investors against
Barclays and other banks.
Aug. 2012 - A joint New York-Connecticut investigation of
Libor send 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 - The BBA says it will support any recommendation
by Martin Wheatley, the FSA's managing director, for a change of
responsibility in setting the rate. The 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 interest rates. On the same day, Barclays says it
fired five employees following its investigations into Libor
Dec. 2012 - The first three arrests are made in the scandal.
Days later, UBS is fined $1.5 billion to settle charges of
rigging the Libor rate.
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.