http://www.cnbc.com/id/47975538U.K. bank Barclays will pay $453 million to U.S. and British authorities to settle allegations that it manipulated key interbank lending rates known as Libor, ramping up pressure on other banks to cooperate in a probe that could cost the financial industry billions of dollars.
Barclays admitted to trying to make Libor look artificially low, to avoid signaling the bank's distress to markets during the financial crisis. The bank also tried to manipulate borrowing rates to benefit its trading positions.
Barclays Chief Executive Bob Diamond acknowledged on Wednesday that the news would damage customer trust in the bank, and said he and other senior executives would forgo a bonus this year.
Libor underpins trillions of dollars in derivative contracts and is a crucial peg for corporate and personal borrowing rates worldwide, linked to everything from U.S. consumer credit cards to loans funding Turkish phone networks. The manipulation, from 2005 through 2009, meant that millions of borrowers globally paid too little or too much interest on their debt.
The U.S. Commodity Futures Trading Commission, the U.S. Department of Justice and the UK's Financial Services Authority settled with Barclays on a civil basis, while Canadian authorities said they still had an open investigation.
The Justice Department also said it still had a criminal investigation in progress, having found that bankers across the industry worked together to manipulate Libor. In some cases the pressure to manipulate rates came from Barclays management, the Justice Department said.