LONDON Britain's Barclays (BARC.L) may face regulatory action against it relating to a global investigation into possible manipulation of interbank lending rates and is in talks about a potential resolution with some of the authorities involved.
Barclays said on Friday it was co-operating with the probe and keeping regulators informed. The bank did not say which regulators had advised it that proceedings could be taken against it or what kind of settlement was being discussed.
Britain's Financial Services Authority, the U.S. Securities and Trading Commission, the European Commission and the U.S. Department of Justice are among authorities who have approached banks around the world to investigate their involvement in Libor lending rates amid suspicion they may have been fixed.
Societe Generale (SOGN.PA) said on Wednesday in its annual report that it too had been contacted as part of the probe.
Citigroup (C.N), HSBC (HSBA.L), RBS (RBS.L) and UBS UBSN.VX have also been involved in the Libor investigation. Several have suspended traders but there have been no criminal charges.
The London Interbank Offered Rate, known as Libor, is the benchmark for around $360 trillion worth of financial contracts worldwide. The daily poll asks banks at what rate they think they will be able to borrow money from each other in 10 major currencies and for 15 borrowing periods ranging from overnight loans to 12 months.
As the credit crisis took hold, allegations started mounting that Libor no longer reflected reality and authorities undertook to examine whether traders at the banks tried to influence whether the rate went up or down in order to profit on bets on the direction it would go.
Like the credit ratings agencies whose role has been under fire both during and after the initial stages of the financial crisis, there are few credible alternatives to replace a system many now regard as outdated and discredited.
On Wednesday, Britain's banking trade body said it had no plans to cede oversight of Libor to regulators, saying it remained fully committed to the interbank lending rates.
Barclays also said it had been named as a defendant in a number of class action lawsuits ﬁled in U.S. federal courts.
These involve claims that between 2006 and 2009 "Barclays and other banks individually and collectively violated U.S. antitrust and commodities laws and state common law by suppressing LIBOR rates", it said in its annual report.
"Barclays has been informed by certain of the authorities investigating these matters that proceedings against Barclays may be recommended with respect to some aspects of the matters under investigation, and Barclays is engaged in discussions with those authorities about potential resolution of those aspects," the bank said in its annual report.
"It is not currently possible to predict the ultimate resolution of the issue," it added.
The bank declined to make any further comment.
UBS publishes its annual report next week.
(Writing by Sophie Walker; Editing by Alexander Smith)