At Least Three Other Banks in Rate-Fixing Mess

MIT Professor Simon Johnson points out that it is a mistake to treat the Libor scandal as confined to Barclays.

"Barclays could not have manipulated those rates by themselves — and that is not what the C.F.T.C. [Commodity Futures Trading Commission] found or the basis of the Barclays settlement. Rather, some Barclays employees colluded with people at other banks in a way that, over a period of years, moved Libor rates up and down, depending on what would favor the trading positions of the people and organizations involved," Johnson writes in the Economix blog at the New York Times.

This is quite right. We know that at least three other banks were acting with Barclays [BCS  10.13    -0.12  (-1.17%)   ].

Here's the relevant bit from the CFTC's order and settlement with Barclays:

During the period from at least mid-2005 through mid-2008, certain Barclays Euro swaps traders, led by the same former Barclays' senior Euro swaps trader, coordinated with traders at certain other panel banks to have their respective Euribor submitters make certain Euribor submissions in order to affect the official EBF Euribor fixing. These requests to and among the traders were made to benefit the traders' respective derivatives trading positions and either maximize their profits or minimize their losses.

The former Barclays senior Euro swaps trader, while still employed by Barclays, spoke daily with traders at certain panel banks concerning their respective derivatives positions in order to determine how to change the official EBF Euribor fixing in a manner that benefitted their derivatives positions. In these conversations, the traders agreed to contact their respective Euribor submitters to request the agreed-upon Euribor submission. The Barclays senior Euro swaps trader also received at times requests for certain Euribor submissions from traders at the other banks, which he then made of the Barclays Euribor submitters as if the requests were his own, at times blind carbon copying the external trader on his emails to Barclays' Euribor submitters. By such conduct, the Barclays Euro Traders were attempting to manipulate Euribor and aiding and abetting the attempts to manipulate Euribor by other banks.

Read more: http://www.cnbc.com/id/48165142