Blame For Interest Rate Manipulation Scandal Is Shifting Toward Global Regulators

 
Civil suits against the banks are also increasingly likely. Paul Tucker received criticism from the Bank of England for his apparent lack of reporting low-balling practices. Low balling involves inflating the health of banks—essentially underreporting Libor submissions—to alleviate concerns about bank health. It appears that low balling occurred often up to and during the 2008 financial crisis.
 
Barclays is trying to shift the blame for its role in low balling to regulators whom it says approved its actions. The bank admitted the practice to the Financial Services Authority (FSA) in two separate phone calls during the fall of 2008. It has gone so far as to accuse Tucker of encouraging the practice.
 
Meanwhile, former Barclays head Robert Diamond has decided not to accept bonuses totaling £20 million to help the bank control the damage from public outrage at the revelation of its Libor abuses. The bank has also spent $450 million to investigate the fixing of Libor rates by Barclays staff.
 
 

 

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