The Federal Reserve Bank of New York said it became aware that Barclays PLC was underreporting borrowing costs for the London interbank offered rate in April 2008.
A Barclays employee explained to a New York Fed staff member that “Barclays was underreporting its rate to avoid the stigma associated with being an outlier with respect to its LIBOR submissions, relative to other participating banks,” the New York Fed said in a statement posted Friday on its website. “The Barclays employee also stated that in his opinion other participating banks were also underreporting their LIBOR submissions.”
Members of Congress are seeking information from U.S. regulators about the issue, while lawmakers in the U.K. are scheduled to hold hearings next week as they continue their own review. The rate-rigging scandal led to Barclays being fined a record £290 million ($451 million) and cost CEO Robert Diamond his job. At least a dozen banks are being investigated for manipulating Libor, the global benchmark for $360 trillion of securities.
The district bank released the documents on its website in response to a request from Rep. Randy Neugebauer, R-Texas, who serves on the House Financial Services Committee, for transcripts of communications between the regulator and Barclays relating to setting interbank offered rates from August 2007 to November 2009.
“Any manipulation of this rate is of serious concern,” Mr. Neugebauer said in an e-mailed statement Friday. “We'll continue looking into this matter to determine who was involved in this practice and whether it could have been prevented by regulators.”
