"Done...for you big boy"- how emails nailed Barclays

LONDON Thu Jun 28, 2012 9:20am BST

A woman walks past a line of Barclays cash dispensers in central London, June 27 2012. REUTERS/Andrew Winning

A woman walks past a line of Barclays cash dispensers in central London, June 27 2012.

Credit: Reuters/Andrew Winning



LONDON (Reuters) - "Done ... for you big boy," read a message sent by a Barclays (BARC.L) banker to one of the lender's traders, who had asked him to fix a key lending rate artificially low.

"Dude, I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger," a trader from another firm emailed a banker at Barclays, showing his thanks for the rate set artificially low.

UK-based Barclays has agreed to pay $453 million (291 million pounds) in fines to UK and U.S. regulators to settle its part of an investigation into whether banks manipulated the London Interbank Lending Rate, know as Libor.

Investigators were helped by extensive emails and other messages about Libor, a set of benchmarks designed to indicate the rate at which banks estimate they are able to lend to each other. Libor is used to set corporate and personal borrowing rates worldwide.

Communications released by authorities on Wednesday showed Barclays traders calling each other "superstar" and with little concern for covering their tracks as they urged colleagues responsible for submitting Barclays' Libor rates to try and influence final prices.

Requests came in such as: "We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help."

And: "Your annoying colleague again ... Would love to get a high one month. Also if poss a low three month ... if poss ... thanks."

Traders made their requests in person, via email and through electronic "chats" over an instant messaging system.

On a few occasions, some traders even made entries in electronic calendars to remind themselves what requests to make of Barclays' Libor submitters the next day.

One trader would shout across the desk to make sure other traders had no conflicting preference to ask the Libor submitters.

"The traders were barking orders like they were at a fast food drive-through and the submitters were so accommodating that they might as well have said, 'do you want fries with that'," said Bart Chilton, a commissioner at the U.S. Commodity Futures Trading Commission, which led the settlement agreement.


Some 257 requests were made to rate submitters from at least 14 Barclays derivatives traders over four years. Traders at other banks also tried to influence Barclays' rate, while Barclays' traders put pressure on the rates offered by others.

Most of the world's biggest banks are under investigation as regulators from Europe, North America and Japan attempt to prove banks rigged rates. Barclays is the first to settle.

"This is the way you pull off deals like this chicken, don't talk about it too much, 2 months of preparation... the trick is you do not do this alone ... this is between you and me but really don't tell ANYBODY," a Barclays trader told a trader at another bank.

Investigators said Barclays derivatives traders got the bank to submit inaccurate rates between 2005 and 2008 so they could profit. The bank also submitted artificially low rates from September 2007 to May 2009 to ease fears it faced funding problems during the financial crisis.

Judging by the messages, Barclays was not alone in having an interest in lowering their submitted rates during the crisis to avoid signalling to markets their distress.

On one occasion, a manager said if Barclays submitted its correct rate, "It's going to cause a shit storm," and the bank submitted a lower rate.


But the bank's treasury staff were beginning to become uneasy. In late 2007, Barclays told the UK Financial Services Authority and the British Bankers' Association, the trade body under whose auspices Libor is set, of its concerns that rivals were setting rates too low.

Months later, a senior Barclays treasury manager called the BBA and warned them that rates were not accurate, but that Barclays was not the worst offender.

"We're clean, but we're dirty clean, rather than clean-clean," he said.

"No-one's clean-clean," the BBA representative responded.

(Additional reporting by Alexandra Alper in New York, and Sarah White and Kylie MacLellan in London; Editing by Tim Dobbyn)

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Comments (2)
Herby wrote:
The whole banking system is a fix, so no surprise then when this story breaks. When did any of you see a senior bank trader/employee giving a TV interview other than a CEO? The whole banking sector is a closed society, once your in your in for life and keep to the secret code of silence or your out forever.

The reasons the fines are paid without a fight is because this is the tip of the iceberg and they don’t want anything else brought into the limelight, not just the financial aspect but the social aspect of sex, drugs and alcohol, I have said for years that regulation is not the cure and that the banking system will implode on itself eventually.

If this ware Politicians being exposed or any other industry there would be criminal proceedings, in the UK the SFO should be investigating, but there are some very powerful people putting the lid on it and pulling the strings.

Jun 28, 2012 10:07am BST  --  Report as abuse
Herby wrote:
Here’s an analogy for you, a casino has a Manager that has conspired with someone to fix a roulette wheel, the Manager and conspiring customer make 100s of thousands over a couple of days until suspicions are raised and the Manager is suspended and the bent customer has his winners cheque cancelled.

Simple you would think hey, criminal proceedings against the Manager and bent customer? No, reason being that if criminal proceedings were taken against them and they were found guilty the Casino then has admitted to all that the roulette table was fixed and biased not just against the house but also other customers who played and lost on that table, admission that one table is fixed is an admission that others maybe fixed and the consequences then become immeasurable in terms of compensation claims and lost business.

This is the same for the banks in this instance, the consequences are far greater than first meet the eye.

Jun 28, 2012 10:34am BST  --  Report as abuse
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