LIBOR Fixing – London Interbank Offered Rate – The Government & The Bank Of England Were Complicit
Having very successfully sued a series of Banks for mis-selling swops, I’ve recently read with interest a series of articles concerning appeals by convicted traders, most recently - Carl Palombo and Tom Hayes, who suggested in their unsuccessful appeals that the English Court of Appeal had misunderstood LIBOR when upholding both sentences and convictions – the appeals were dismissed.
Without involvement in those particular traders’ cases, we do not comment on the specific facts. However, the media coverage surrounding the handful of convicted traders raised valid issues.
That small number of prosecutions felt like an attempt to “make an example” of a few—a point those convicted can legitimately raise, even if it doesn’t reduce the liability of the banks or the individuals involved.
The Bank of England and the Government must have known about these rates, just as hundreds, if not thousands, of traders did. What kind of central bank or government could fail to realize that LIBOR—intended to represent the rate at which banks lent to one another—was so routinely and remorselessly manipulated that it became a rate at which no one lent anything to anyone?
The only group kept in the dark was the general public.
The mis-selling of LIBOR-linked swaps devastated large sections of the UK’s small and medium enterprise (SME) sector, leading to extensive litigation with mixed outcomes. The key takeaway is that mounting legal pressure and public exposure ultimately forced LIBOR to be scrapped, limping along until it was finally retired in June 2023.
Through our sister company, Sintel (www.sintelglobal.co.uk), we completed our own research. Armed with that intelligence…
…we successfully sued a number of banks.
Swaps were a misconduct scandal of unimaginable proportions.
What remains truly shocking is that the Bank of England and the Government did nothing for years while business owners lost their livelihoods.
LIBOR may be gone, but the broader environment—characterised by weak regulation and institutional indifference—appears as entrenched as ever.