3 Banks in Center of Libor Scandal

One former trader says Libor has been rigged since at least 1991
By Mark Russell,  Newser Staff
Posted Jul 28, 2012 9:01 AM CDT
3 Banks in Center of Libor Scandal
In this June 29, 2012, file photo, two specialists work on the trading floor of the New York Stock Exchange.   (AP Photo/David Karp, file)

Recently released court documents suggest that traders at Barclays, the Royal Bank of Scotland, and UBS were most central to the Libor-rigging scandal, reports Reuters. Those three banks—much of the blame has fallen on just Barclay's up to now—employed more than a dozen traders who tried influencing dollar, euro, and yen rates. As several of those traders under investigation worked at a variety of banks over the years and still have senior jobs on Wall Street, investigators believe they made rate-fixing more systematic over the years.

According to prosecutors' documents, euro and dollar rate-rigging appears to have begun in 2005, spreading into the yen rate market by 2007 by RBS and USB. Traders at JPMorgan Chase and Deutsche Bank are also reportedly under investigation. On the other hand, one former Morgan Stanley trader writes in the Financial Times that he warned of Libor-rigging going on way back in 1991. "Libor misreporting has been going on for decades," writes Douglas Keenan. "Why have investigations only recently begun?" (More Libor rate-fixing scandal stories.)

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