Libor scandal

from Wikipedia, the free encyclopedia

The Libor scandal called the revealed in 2011 fraudulent manipulations of the reference interest rate LIBOR and other interest rates ( EURIBOR , Japanese TIBOR ) in interbank business .

background

The reference interest rates have a major influence on a large number of financial market transactions. By manipulating the reference interest rates, the banks involved have gained advantages:

  • Participants in the manipulation encounter a lower interest rate risk , outsiders encounter an additional risk caused by the manipulation.
  • Self-controlled changes in the reference interest rates can be exploited similarly to insider trading by means of speculative transactions.
  • Private loans are often based on the reference interest rate at the beginning of the month; by periodically increasing the reference interest rate at the beginning of the month, borrowers can be given overpriced interest rates.

Manipulations that have become known

On suspicion of manipulation of the Euribor , the European Commission had the London offices of the Royal Bank of Scotland searched and numerous documents confiscated in October 2011 .

In June 2012 it became known that the Barclays bank had been manipulating the Libor for years. The interest rates given by the banks concerned were therefore not based on their actual internal bank values, but were invented. Authorities in the USA, Europe and Japan then suspected that up to 20 banks worldwide could have been involved in the manipulation. On July 12, 2012, the institutions that may have been involved included Bank of America , Barclays, Mitsubishi-UFJ , Citi , Credit Suisse , Deutsche Bank , HSBC , JP Morgan , Lloyds , Royal Bank of Scotland and UBS .

At the time, analysts estimated the financial damage that parts of the global economy could have suffered as a result of the Libor manipulation at 17.1 billion US dollars. The damage that the financial sector could arise at the end of the Libor scandal - including through collective action by property owners in the US who consider themselves harmed by excessive mortgage interest on Libor-based - has been described by experts to a total of almost nine billion US Dollars valued.

Responses from regulators

Penalties and Settlements Imposed

Three banks agreed with British and American authorities comparisons : The British Barclays Bank paid 470 million US dollars (360 million euros), the Royal Bank of Scotland (RBS) paid 612 million US dollars (455 million euros), the Swiss UBS 1.2 billion euros penance .

The Dutch Rabobank reached an out-of-court settlement with the British, American and Dutch authorities in October 2013 on a fine of 774 million euros.

On December 4, 2013 it became known that the EU Commission had imposed a record fine of 1.7 billion euros on several major banks for manipulating interest rates, according to investigations by the EU antitrust authority, the Directorate-General for Competition . Affected are the Deutsche Bank (725 million euros fine), the French Société Générale (almost 446 million euros), the Royal Bank of Scotland (391 million euros), the US financial institutions Citigroup (80 million euros), JPMorgan Chase (70 Million euros) and RP Martin (250,000 euros). Some of them admitted their guilt, whereupon the fine was reduced by ten percent. The banks Barclays and UBS received no fines because they had contributed significantly to the investigation of the manipulation.

Since this was only a fraction of the damage incurred, i.e. the income, it was still a worthwhile "business" for the banks.

In April 2015, Deutsche Bank reached an agreement with the relevant regulatory authorities in the USA and Great Britain on a fine of 2.5 billion dollars. She also committed herself to dismissing responsible employees and subjecting herself to stricter surveillance in the USA. The punishment was so high on the grounds that the bank had tried to deceive the authorities in processing the case.

Organizational consequences

The British government and the British financial market regulator Financial Conduct Authority (FCA) commissioned a committee of experts to draw conclusions from the fraud. On July 8, 2013, this committee decided to remove the responsibility for fixing the Libor as of 2014 from the London Stock Exchange and instead transfer it to the New York Stock Exchange Nyse Euronext . To this end, Nyse Euronext is founding a subsidiary in Great Britain which - like the major London banks previously responsible for the Libor - is controlled by the British banking supervisory authority.

Responsible individuals

The main suspect in the Libor scandal Tom Hayes (former trader at UBS and Citigroup) testified in a court in London in October 2013. According to the court, he worked with 22 people in his manipulations. Hayes is regarded as a central figure in the Libor scandal; he was charged with eight cases between 2006 and 2010. Further results were announced in April 2015. Accordingly, Anshu Jain from Deutsche Bank was also involved. The main trial against Hayes began on June 16, 2015 with his hearing; he was sentenced to 14 years in prison in early August 2015.

As part of the investigations, Stefan Krause , Stephan Leithner, Michele Faissola and Alan Cloete - all employees in management positions at Deutsche Bank - are also said to have been targeted by BaFin .

In November 2015 , the British Serious Fraud Office brought charges against six Deutsche Bank employees and four Barclays Bank employees with regard to manipulation of Euribor . The suspects were due to appear in court in January 2016.

As of April 2018, five traders were tried. A London court sentenced Christian Bittar on July 19, 2018 to five years and four months in prison.

Four former Deutsche Bank traders escaped the trial because the public prosecutor's office and, in February 2018, the Frankfurt Higher Regional Court had not complied with extradition requests from the British authorities.
A French dealer from Société Générale was not extradited either.

See also

Web links

Individual evidence

  1. Caroline Binham: US Woman Takes on Banks Over Libor. Financial Times , October 15, 2012, accessed December 4, 2013 .
  2. ^ Harry Wilson: European Commission raids RBS offices in Euribor probe. In: The Telegraph . October 20, 2011, accessed November 13, 2015 .
  3. nzz.ch: Libor manipulations at Barclays - calls for penalties for traders
  4. ^ Spiegel Online from July 9, 2012: Alleged interest rate manipulation: How Metzler wants to get Deutsche Bank off
  5. Christian Siedenbiedel, FAZ.net of February 10, 2013 Interest manipulation Die Libor-Gang. Little by little, the criminal energy with which banks have manipulated interest rates over the years is emerging. [1]
  6. a b Harald Freiberger and Andreas Oldag, "Politics is taking the Libor away from London: the financial institutions manipulated the interest rate for years in their favor - a huge scandal. Now the supervisors are drawing the conclusions: In the future, the New York stock exchange operator NYSE Euronext will be responsible ”. Süddeutsche Zeitung No. 157 of July 10, 2013, p. 25. genios.de
  7. ↑ Key rate manipulation by Royal Bank of Scotland: Libor scandal costs British bank 455 million euros. In: Sueddeutsche.de . February 6, 2013, accessed April 27, 2015 .
  8. Involvement in Libor scandal: Rabobank has to pay a fine of millions. In: Tagesschau.de . October 29, 2013, accessed April 27, 2015 .
  9. Manipulation of interest rates: EU Commission imposes record fine in Libor scandal. In: Süddeutsche.de. December 4, 2013, accessed April 27, 2015 .
  10. Interest rate manipulation: Banks have to pay a fine of 1.7 billion euros. In: Spiegel online . December 4, 2013, accessed April 27, 2015 .
  11. Affair over interest rate manipulation: Deutsche Bank pays record fine in Libor scandal. In: Spiegel online. April 23, 2015, accessed April 27, 2015 .
  12. ↑ The mastermind behind the Libor scandal had 22 helpers. In: faz.net . October 22, 2013, accessed November 13, 2015 .
  13. Rabobank faces a fine of just under a billion dollars. In: faz.net . October 23, 2013, accessed November 13, 2015 .
  14. manipulation of the Libor interest rate: trial not before 2015. In: taz.de . October 22, 2013, accessed November 13, 2015 .
  15. Deutsche Bank is beaten by the regulator. In: Süddeutsche Zeitung . April 23, 2015, accessed November 13, 2015 .
  16. ^ Libor trial: Tom Hayes compares derivatives market to wild west. In: The Guardian . April 16, 2015, accessed November 13, 2015 .
  17. Manipulated interest: main suspect in Libor scandal sentenced to 14 years in prison. In: Spiegel Online. August 3, 2015, accessed October 28, 2015 .
  18. Deutsche Bank: Libor report criticizes other managers. In: Wirtschaftswoche . July 17, 2015, accessed November 4, 2015 .
  19. Katharina Slodczyk: Deutsche Bank and Euribor: Great Britain takes on bankers. In: Handelsblatt . November 13, 2015, accessed November 13, 2015 .
  20. ^ Carolyn Cohn, Huw Jones: UPDATE 1 - Britain's Serious Fraud Office charges 10 invidividuals over Euribor. In: Reuters . November 13, 2015, accessed November 13, 2015 .
  21. ^ Interest rate manipulation Embarrassing process sueddeutsche.de, on April 9, 2018