Yet another replica of the Libor scandal, the name of the “London Interbank Offered Rate long the reference rate on the monetary market for foreign currency trading. Several banks have been convicted for manipulation of the interbank rate during the years 2005-2010. This Thursday, it was learned that the German Deutsche Bank, the american Citigroup and britain’s HSBC had agreed to pay a total of $ 132 million to settle a class action led by investors aggrieved.
The German bank has signed the biggest check ($80 million) : in 2015, it had been condemned by the us authorities to pay a fine of more than $ 2 billion. Citigroup has agreed to pay 33.4 million and HSBC 18.5 million, according to the terms of the agreement filed with a court in Manhattan.
In 2015, an ex-trader’s flagship UBS and Citigroup, Tom Hayes, has been sentenced in London to 14 years in prison for having manipulated the Libor, in order to improve its results, are astronomical, estimated to 450,000 billion dollars, during a period from 2006 to 2010.
The programmed death of the Libor
This action in the name of collective was driven by the company’s asset management Metzler Asset Management. The agreement, which must still be approved by the judge in charge of the case, may indemnify any person who has performed transactions in derivatives Eurodollar Exchange, including the Chicago Mercantile Exchange between January 2003 and may 2011.
This broad case, which revealed that banks and their traders had colluded to manipulate the rate, has largely undermined the image of the Libor. This rate, originally calculated every working day at 11 hours from London by 16 major international banks and is supposed to reflect the average rate at which they lend without collateral, will be removed by the end of 2021, announced in July, the uk regulator, the Financial Conduct Authority.
In the alternative, the FCA has referred to the rate Sonia, which reflects the rate of funding to a day of banks on the market that is not secure to pounds. The Euribor, the interbank rate for exchanges in the euro, has also been the subject of manipulation and a scandal in parallel with his share of fines and settlement agreements.Its future is also in question, while the european central Bank has planned to launch its own reference rate of interbank by 2020.