Barclays

They were discussing on the television the falsification at the instigation of people employed by Barclays of LIBOR, the interest rate by reference to which the interest charged by banks to their borrowers is often calculated. A man in a suit appeared and said that it was all very regrettable and reprimands might well be called for but that there was no question of anyone’s having committed a criminal offence. I wonder.

LIBOR is the interest rate at which banks offer deposits to each other in the interbank market. The actual rates are reported to someone who tells the banks what, as a result, LIBOR is. The banks then lend to their customers at LIBOR plus whatever is the margin agreed with the customers.

Apparently individuals at Barclays persuaded individuals at other banks to lie about the rates actually offered, so that LIBOR no longer reflected actual practice. We can assume that this was not done through sheer joie de vivre and that both the banks and the individuals (directly or indirectly) benefited as a result.

Here is what Section 2 of the Fraud Act 2006 says, repeating and amending similar wording in the Theft Act 1968:

Fraud by false representation

(1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or expose another to a risk of loss.

If that’s what the people at Barclays did, we do seem to have our criminal offence, both as regards the individuals and Barclays corporately. Not entirely surprisingly it’s called Fraud.

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4 thoughts on “Barclays

  1. It is part of the general decay of honour throughout the upper classes. Last week the doctors went on strike. Unbelievable. Well, no longer unbelievable. Now the Bankers. Next week the law? It sickens me.
    Anthony

    • alablague says:

      Twenty years ago I used to do the legal work on LIBOR-based loans. I used to tell my borrower clients that they could accept the bank’s word about LIBOR as the factual truth, and that if the bank’s solicitors told us something we could rely on the fact that, other things being equal, they were also telling us the truth. Neither any longer.

  2. I didn’t express my anger and hurt sufficiently strongly in my first comment. It started when the MPs who had stolen money by falsifying their expenses were let off if they returned the money. Then the imprisonment of 1,292 young people for releasing their anger and frustration in last Augusts riots. One given six months for stealing some bottled water. To the barricades?

  3. Anonymous says:

    As a lawyer what I’d really like to see is the rule of law fairly applied. Little sign of that, as you say. The last time I mounted the barricades – a long time ago admittedly – all I found there was an excitable man from the Daily Mail.

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