SALON

Tuesday, Dec 11, 2012 3:30 PM UTC

UK authorities arrest 3 in LIBOR rate probe

By

Topics: From the Wires,

LONDON (AP) — British police arrested three people Tuesday as part of their investigation into the manipulation of a key benchmark interest rate — the first British arrests in a scandal that’s had global ramifications.

The three men — aged 33, 41 and 47 — were not named by officials. Search warrants were executed at the homes of all three, who are British nationals working in the United Kingdom.

The arrests follow an investigation from Britain’s Serious Fraud Office. It opened its probe in July after Barclays was fined $435 million by American and British agencies for creating false reports on its borrowing costs between 2005 and 2009, specifically related to the London interbank offered rate, or LIBOR.

LIBOR is the rate banks use to borrow from each other — and it is critical. The rate indirectly affects the cost of loans that people pay when they take out loans — such as when consumers buy a home or car.

News that Barclays — and likely other banks — were manipulating a rate that underpins so many financial transactions prompted outrage among British lawmakers. Parliament’s Treasury committee demanded sweeping changes to oversight of the banking industry and called for a tightening of laws to make it easier to prosecute rate-fixing offenses.

Numerous other banks are reportedly under investigation for similar violations.

The Financial Times has reported that at least 16 banks including three based in Britain are under investigation by U.S. authorities.

But Barclays has been the most bank most closely associated to the scandal, partly because of its cooperation with authorities. The scandal that followed forced Bob Diamond to resign as Barclay’s chief executive.

Barclays is among several banks which submit daily data on the rates they are paying to borrow — data that is used to calculate LIBOR. The British Bankers’ Association, a trade group, sets the LIBOR daily after about a dozen international banks submit borrowing estimates. Regulators allege some banks purposefully submitted fake numbers to have the LIBOR set at a rate that was more favorable to them.

By Danica Kirka

More By Danica Kirka.

Next Article

You Might Also Like

More Related Stories

Featured Slide Shows

Gripping photos: The people of the Turkey protests (slideshow)

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

More Related Stories

Comments

 0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "We Are All Completely Beside Ourselves": Growing up primate

Recommendations