Barclays Faces Trans-Atlantic Scrutiny
Along with an inquiry in London, some of the biggest financial institutions in England are now coming under scrutiny from Washington. Ben Bernanke, chairman of the Federal Reserve, told the US Senate that he could not guarantee that libor rates were no longer being manipulated. Al Jazeera's Barnaby Phillips reports from London.

Le Liborgate pourrait coûter 20 milliards aux banques

LE FIGARO: Morgan Stanley a estimé la facture que pourraient se voir infliger dix grandes banques susceptibles d'être impliquées dans la manipulation des taux Libor et Euribor. Société Générale pourrait être fortement impactée.

L'étude réalisée par Morgan Stanley soulève l’énormité du scandale financier du Libor. Le broker américain a publié une note de recherche -que lefigaro.fr s'est procurée-, qui tente de chiffrer les conséquences en termes de coûts et d'image de l'affaire du Libor, pour onze grandes banques internationales susceptibles d'avoir manipulé ces taux interbancaires d'une importance colossale dans le financement de l'économie mondiale. » | Par Marine Rabreau | vendredi 13 juillet 2012

Timothy Geithner Pressed Mervyn King to Reform Libor in 2008

THE GUARDIAN: Bank of England releases memo from senior US official calling on governor to improve integrity of Libor setting

Sir Mervyn King, governor of the Bank of England, has been put at the centre of the Libor-rigging scandal after a senior US official called on him to reform the interest rate market in 2008.

Timothy Geithner, who was then the president of the Federal Reserve Bank of New York, called for six changes he said would improve the integrity of Libor, the London interbank offered rate which is used around the world to set the rate of borrowing for many households and companies.

Geithner, who is now the US treasury secretary, sent his memo in June 2008. The memo, published by the Bank of England on Friday (pdf), shows that the recommendations made by Geithner came before October 2008 when Barclays was found to have lowered its Libor submissions to ensure there was no suggestion that it was in financial difficulty during the banking crisis.

The Bank appeared to pin the blame on the British Bankers' Association, which compiles Libor. The Bank said on Friday that a review of Libor was launched by the BBA in June 2008 in the light of "concerns about difficulties in setting Libor in the stressed market conditions of late 2007 and 2008". The governor endorsed Geithner's recommendations. » | Jill Treanor, City Editor | Friday, July 13, 2012

Barclays Chief Bob Diamond Could Be Brought Before Congress, Sources Say

THE GUARDIAN: Washington politicians considering asking former Barclays chief executive to testify as Libor-fixing controversy crosses to US

US politicians are considering summoning Barclays' former boss Bob Diamond to Washington to answer questions about the Libor-fixing scandal, in a sign that the controversy is becoming an ever hotter issue in the US.

Two high[-]powered committees, the Senate Banking committee and the House Financial Services committee, are both believed to be considering calling Diamond to testify. The committees declined to comment, but sources close to them said they were in the early stages of gathering information and were almost certain to call the former Barclays chief executive after the summer recess. A spokesman for Bob Diamond declined to comment.

Senator Tim Johnson, chairman of the banking committee, said on Tuesday that his panel would quiz Federal Reserve chairman Ben Bernanke and Treasury secretary Timothy Geithner on the scandal at hearings scheduled before the August break.

"I am concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates by some financial firms," said Johnson.

The US justice department is already investigating the scandal, and several cities and state pension funds have launched legal action, claiming that their investments suffered as a result of the manipulation of Libor rates. » | Dominic Rushe in New York and Jill Treanor | Wednesday, July 11, 2012

Rate Cut to Head Off Disaster?
THE SUNDAY TIMES: PRESSURE is growing on the Bank of England to cut interest rates this week as gloom over the economy intensifies.

Two of Britain’s best-known economists, Patrick Minford and Tim Congdon, say the Bank’s monetary policy committee (MPC) needs to slash rates to get the banking system working and head off a sharp downturn.

Minford, a professor at the Cardiff Business School and former adviser to Margaret Thatcher and the Treasury, called for an urgent 0.75 percentage point cut. He said the bank was being “irresponsible” in not acting already to “stabilise a fast-deteriorating situation” brought about by the sharp rise in money-market interest rates since summer.

Three-month Libor (London interbank offered rate), at which banks lend to each other, hit nearly 6.6% last week. “I regard the Bank’s behaviour as highly irresponsible, as I regard its behaviour in August and September as irresponsible and neglectful of a century of monetary teaching,” he said. “It is time for some sense to prevail.” Rate cut urged to end the gloom >>>

Mark Alexander