Barclays: Other banks set for Libor fines

16 July 2012 | By Chris Salih

Senior managers at Barclays have told staff in an internal memo to expect other banks to receive fines as the Libor scandal continues to widen.

A number of the banks’ chiefs sent the memo on Friday which stated that revelations about its rivals would see Barclay’s culpability “put into perspective”.

Last month, Barclays was fined £290m by the FSA and US authorities for manipulating the Libor rate. It is expected to be only the first of a number of banks to settle with authorities.

The memo said: “As other banks settle with authorities, and their details become public, and various governments’ inquiries shed more light, our situation will eventually be put in perspective.”

It also admitted that customers, shareholders and regulators “all have a right to feel let down” by the bank after it admitted to manipulating Libor.

Barclays chief executive Bob Diamond, chairman Marcus Agius and chief operating officer Jerry Del Missier have all quit their roles on the back of the scandal. Del Missier is set to appear before the Treasury select committee later today.

Research from Morgan Stanley revealed that as many as twelve banks in the middle of the Libor rate-rigging scandal could face combined regulatory fines of more than £14bn.

Morgan Stanley said the estimated fines would cut 4-13 per cent off banks’ earnings per share for 2012. The research also assumes that most of the other 11 banks will admit to similar behaviour but wil not receive the discount Barclays’ received for early co-operation. The report says Royal Bank of Scotland is likely to face one of the biggest fines with Deutsche Bank also likely to be hit.

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