Lloyds Banking Group faces fine of up to £300m over Libor rigging

Pile Of Coins

Bailed-out Lloyds Banking Group appears poised to become the latest financial firm to be penalised for rigging Libor and is said to be facing a fine of between £200m and £300m.

The bank, 24% owned by the taxpayer, is expected to pay the fine to the City regulator, the Financial Conduct Authority, as well as regulators in the US, which are involved the extensive investigation into the potential rigging of the benchmark interest rate. The penalty for Lloyds comes more than two years after Libor manipulations at Barclays were exposed and regulators on both sides of the Atlantic imposed a £290m fine.

That fine in June 2012 has since been followed by settlements with Swiss bank UBS, bailed-out Royal Bank of Scotland, Dutch bank Rabobank, and two money brokers, Icap and RP Martin.

Lloyds would not comment on a report in the Financial Times about the scale or timing of the fine, which, it was reported, could be announced ahead of the bank's half-year results, due on Friday.

Earlier this month, when the prospect of a settlement over Libor was first raised, Lloyds said it was co-operating with investigations.

At the time of the Barclays fine, the FCA had said it been looking at seven or eight cases, and last week Martin Wheatley, chief executive of the FCA, implied that the most serious abuses had already been addressed.

"The remaining cases weren't as serious as the cases we took first," he said at the FCA's public meeting.

When RBS was fined £390m in 2013, the government demanded that bonuses were clawed back in order to ensure that UK taxpayers did not pay penalties being imposed by US regulators.

Previous Libor fines have been accompanied by the release of pages of emails and electronic chats between traders, including details of attempts to manipulate rates, and the Lloyds settlement is expected to involve a similar batch of documents. In the wake of the Libor scandal, several other examinations have begun into other benchmarks used to rate financial products around the world, and foreign exchange markets and the pricing of gold have also come under scrutiny.

Powered by Guardian.co.ukThis article was written by Jill Treanor, city editor, for The Guardian on Friday 25th July 2014 00.17 Europe/London

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