Barclays settles charges it conspired to manipulate interest rates

{mosads}Furthermore, as the financial crisis began to worsen, regulators charge that Barclays executives decided to submit artificially low LIBOR reports to avoid negative press and speculation about its stability.

Senior managers at the bank described Barclays’s higher LIBOR submissions as “head above the parapet,” and pushed to falsely lower them to avoid negative attention, according to the Commodity Futures Trading Commission (CFTC).

Some submitters pushed back against this strategy, warning their bosses they were “being dishonest by definition” in submitting “patently false rates.”

Regulators hailed the settlement as needed to ensure the sanctity of the key interest rates, which are used as a benchmark for other consumer and business loans.

“People taking out small-business loans, student loans and mortgages, as well as big companies involved in complex transactions, all rely on the honesty of benchmark rates like LIBOR for the cost of their borrowings,” said CFTC Chairman Gary Gensler. “Banks must not attempt to influence LIBOR or other indices based upon concerns about their reputation or the profitability of their trading positions.”

Barclays executives admitted wrongdoing in their own statement. Chief Executive Bob Diamond said its past actions “fell well short of the standards to which Barclays aspires.”

“Nothing is more important to me than having a strong culture at Barclays; I am sorry that some people acted in a manner not consistent with our culture and values,” he said, adding that top executives at the bank are forgoing bonuses this year.

Under the settlement, Barclays will pay a $200 million fine to the CFTC, $160 million to the Justice Department and another £59.5 million to the United Kingdom’s Financial Services Authority.