Libor-fixing scandal

[superfrank]

What did Bank of England say to Barclays about Libor?
http://www.bbc.co.uk/news/business-18665080

In making false submissions about their borrowing costs, managers at Barclays believed they were operating under an instruction from Paul Tucker, deputy governor of the Bank of England.

the BoE are desperately trying to distance themselves from the story, but i wouldn't be surprised if they did give the banks the nod. hopefully we'll get to hear the truth sooner or later.

[Iron]

http://yfrog.com/mgjpgegj

[jimrobo]

did you watch the diamond testomony?? He was a right slippery toad. Blatantly lying IMHO and trying to dodge as many questions as he could.

Could get interesting when the others are interviewed

[andyfuller]

Could get interesting when the others are interviewed

Wouldn't hold your breath these mp select committees are a waste of space, more into tweeting than asking decent questions. Diamond or should I say bob just ran rings around them.

[jimrobo]

Well as he was first anything he says they don't have much to argue against him. If someone turns round and says something completely contrary then it will get interesting when he comes back

[superfrank]

the SFO have got involved now. hopefully Diamond and a few others will get 20 years each, but i won't be holding my breath.

[Iron]

Does anyone know whether, legally, there is any difference between what the Barclays traders did and what manipulators on Betfair do every day of the week when they spoof the market with large orders?

Jeff

[jimrobo]

The SFO are after them for submitting false market information aren't they

[superfrank]

Does anyone know whether, legally, there is any difference between what the Barclays traders did and what manipulators on Betfair do every day of the week when they spoof the market with large orders?

Jeff

yes. there is nothing illegal about entering or withdrawing orders in a market. the rules are set by the exchange and i can't see a problem as spoofers take large risks with their own money (they've calculated that in certain situations the risk/reward ratio makes it profitable to do so). don't get me wrong, i find it a disagreeable strategy and a slightly underhand method of trading, but illegal, no way.

what Barclays and others did is very different and is fraud.

edit: futures exchanges charge for orders that are withdrawn from a market without being filled - most futures brokers absorb that cost and it is ultimately passed on to clients in their commissions on completed trades.

[Iron]

From a website run by the National Fraud Authority (http://www.actionfraud.police.uk/fraud- ... nipulation):

'Market manipulation could include making false or misleading statements and completing transactions that have the purpose of giving a false impression about supply or demand.' (emphasis mine)

Jeff

[jimrobo]

superfrank....is that true about the cancelation charges??? I've never even heard of that? I know there is an issue with using cancel and replace in spread trading and you can get charged by the exchange if you do it too many times??? But the threshold is pretty large.

[superfrank]

superfrank....is that true about the cancelation charges??? I've never even heard of that? I know there is an issue with using cancel and replace in spread trading and you can get charged by the exchange if you do it too many times??? But the threshold is pretty large.

yeah because i looked at another broker (can't remember which atm) and they charged (and it wasn't tiny) and the note explained that some brokers pass it on directly and others don't. it might not be the case with all futures exchanges but i imagine it is.

[superfrank]

From a website run by the National Fraud Authority (http://www.actionfraud.police.uk/fraud- ... nipulation):

'Market manipulation could include making false or misleading statements and completing transactions that have the purpose of giving a false impression about supply or demand.' (emphasis mine)

Jeff

as i understand it Barclays were lying about their borrowing costs, not trading directly.

[jimrobo]

hmmm.....Theres nothing for the eurex anyway in their charges page?? Interestingly their charges are tiny compared to the brokers fee!! Managed to find something relating to IB and the CME but that was 2005 and looks like it never came into effect by the looks of it?

http://www.eurexchange.com/trading/fees_en.html

thats a bit of an eye opener!!!

re the barclays thing.....the traders were asking the submitters to post an incorrect rate so that it reflected favourably on their trades. It is a question of reporting incorrect market data that they are trying to get them on.

[Iron]

True, but my point was that what certain Betfair guys do and what certain Barclays traders allegedly did may both be classed as fraud in the eyes of the law...

As an aside, I wonder to what extent 'information manipulation' takes place in the Betfair markets, where (for example) someone may lay a favourite heavily just before the trainer goes on TV to talk down the horse's chances (even though he thinks the horse will run really well today)...

Jeff

as i understand it Barclays were lying about their borrowing costs, not trading directly.