Watchdogs fine Lloyds Banking Group £217m for Libor rate rigging - UPDATE

28th Jul 2014 14:32

US and British regulators have fined two subsidiaries of Lloyds Banking Group £217m for involvement in the Libor inter-bank interest rate rigging scandal.The UK's Financial Conduct Authority (FCA) has fined Lloyds Bank and Bank of Scotland, both part of LBG, £105m for what it described as "serious misconduct" related to the Bank of England's Special Liquidity Scheme (SLS), the Repo Rate benchmark and the London Interbank Offered Rate (LIBOR).About £70m of the fine related to attempts by Lloyds to manipulate fees payable to the Bank of England for the firm's participation in the SLS, a taxpayer-backed government scheme to underpin British banks in the financial crisis.The rest of the £105m related to the Repo Rate benchmark and the London Interbank Offered Rate (LIBOR).The US Commodity Futures Trading Commission has fined the bank $105m and it also faces an $86m penalty from the US Department of Justice.The Bank of England, which has received £7.76m in compensation from Lloyds, said in a statement: "The fact that Lloyds and Bank of Scotland, the largest beneficiaries of this assistance, manipulated their three month GBP Repo Rate submissions in order to reduce fees is highly reprehensible and clearly unlawful."Lloyds' settlement follows fines for rivals Barclays and Royal Bank of Scotland, which agreed to pay $453m and $612m respectively in 2012 and 2013.A Lloyds spokesman said: "The group condemns the actions of the individuals responsible for the conduct in question, which it regards as totally unacceptable and unrepresentative of the cultural changes it has implemented. "The manipulation of submissions covered by the settlements took place between May 2006 and 2009 and the individuals involved have either left the group, been suspended or are subject to disciplinary proceedings."The group's board will now consider all the remuneration implications and potential actions available to it. "The issues subject to the settlements were restricted to a specific area of the business and were not known about or condoned by the senior management of the group at that time. "In March 2011, Lloyds Banking Group's management proactively strengthened the systems and controls governing its LIBOR submissions."PW