Barclays Bank has been fined a total of £290 million for manipulating interest rates in order to benefit their trading position, secure their reputation during the financial crisis and to aid other banks.
The Financial Services Authority fined the bank £59.5 million with an additional total of $360 million fines imposed by the Department of Justice and the US Commodities and Futures Commission.
The £59.5 million fine levied by the FSA was the largest ever imposed by the regulator. The FSA imposed the fine for misconduct after an investigation relating specifically to the manipulation of dollar Libor and Eurolibor rates which govern the cost of lending between banks.
However the manipulations are likely to have had little impact on UK consumers because the rates related to US dollars.
Barclays have announced that Chief Executive Bob Diamond, and other executives at the bank will not receive bonuses this year.
The bank was fined for trying to manipulate benchmark interest rates that affect the rates offered to customers on savings, credit cards and mortgages.
Bob Diamond said:
“These activities fell well short of the standards to which Barclays aspires in the conduct of its business.
“I am sorry that some people acted in a manner not consistent with our culture and values. To reflect our collective responsibility as leaders, Chris Lucas, Jerry del Missier, Rich Ricci and I have voluntarily agreed with the Board to forgo any consideration for an annual bonus this year.”
Peter Vicary-Smith of Which? said:
"Four years on from the financial crisis there is no evidence that the worst culture and practices in banking have changed at all. The Government must now fast track plans to reform the industry and ringfence ordinary retail banking services from the toxic activities of their investment banking arms.
“The Financial Services Authority should be open and transparent about the cost to ordinary borrowers of these rigged interest rates, and if people have lost out the banks should be forced to compensate borrowers.
"The British Bankers Association, which is so visible when it campaigns against banking reform yet today is silent, must not escape scrutiny for its role in managing the Libor scheme. It is surely time for this crucial function to be handed to an accountable authority capable of ensuring the information provided by banks is robust."