By Josh Barro and the Bloomberg Editors
Like Barclays and UBS, RBS admitted that its traders sought to benefit their own positions by manipulating the London Interbank Offered Rate -- a transgression for which the bank will pay $612m in fines. The misconduct occurred largely in Japanese-yen and Swiss-franc Libor, over a period stretching from October 2006 to November 2010.
Unlike Barclays and UBS, RBS didn’t admit to a second, more institutional form of misbehavior: artificially and systematically lowering borrowing costs reported for the calculation of dollar Libor during the 2008 financial crisis. Banks engaged in this kind of manipulation to make themselves look healthier than they were. If enough banks did it, it could have led to a large and persistent understatement of a benchmark that influences the value of at least $300 trillion in loans, bonds and derivatives.
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