Jun. 27, 2012 (Bloomberg) -- Barclays Plc (BARC) deliberately reported artificially low borrowing costs at the height of the 2008 financial market turmoil after a senior manager discussed external perceptions about the bank’s strength with regulators at the Bank of England.
Barclays, which was fined $453.2 million by U.S. and U.K. regulators for submitting false London and euro interbank offered rates, “believed mistakenly that they were operating under an instruction from the Bank of England” to lower its Libor submissions, Britain’s Financial Services Authority said today.
The case is the first in an international investigation into whether banks tried to manipulate Libor, the benchmark rate for $360 trillion of securities, to hide their true cost of borrowing as financial markets were roiled by the September 2008 collapse of Lehman Brothers Holdings Inc.
At that time, Barclays was concerned about how it was being perceived due to its higher Libor submissions relative to other banks whose reported borrowing costs helped establish the benchmark rate, the U.S. Commodity Futures Trading Commission said in its order today.