(Reuters) - 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 interbank rates.
September 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.
August 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.
August 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.
September 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 September 28, but stops short of scrapping the benchmark interest rate.
November 2012 - Deutsche Bank faces skeptical 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 rigging.
December 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.
Reporting by David Cutler and Kirstin Ridley; Editing by Erica Billingham