Everything you wanted to know about Barclays, LIBOR and Britain’s ‘Perfect Storm’ of Scandal, but were afraid to ask

As the chairman of Barclays resigns in the wake of an interest-rate fixing scandal, the city of London is in crisis and Prime Minister David Cameron has announced an urgent Parliamentary inquiry according to a Daily Beast report.

 

“It’s a turning point,” said Martin Vander Weyer, a former director of the investment arm of the British bank, now known as Barclays Capital. “Three scandals have come in Britain in a perfect storm last week.” The NatWest online bank didn’t work for 10 days because of a software problem. Meanwhile, Barclays was caught mis-selling complex interest-rate insurance to small companies and, more important, a LIBOR scandal has emerged.

The London Interbank trading system, known as LIBOR, and its smaller counterpart, EURIBOR, between them set the benchmark for interest rates around the world. The self-regulated system relies on banks accurately reporting the costs of their own borrowing, but the Financial Service Authority and the U.K. Department of Justice fined Barclays a combined $450 million last week for fixing the rate from 2005 to 2009. The early misreporting was to the benefit of the company’s derivatives traders…..

For more check out http://www.thedailybeast.com/articles/2012/07/03/barclays-natwest-libor-britain-s-perfect-storm-of-scandal.html