The Federal Reserve Bank of New York today has just released documents related to the Barclays-LIBOR scandal with Barclays PLC (NYSE: BCS). These documents were requested (request or demand?) by Chairman Neugebauer of the U.S. House of Representatives, Committee on Financial Services, sub-committee on Oversight and Investigation. The New York Fed also released additional materials that document efforts in 2008 to highlight problems with LIBOR and press for reform.
The NY Fed reported that in its research and dealings “In the course of these exchanges, market participants reported dysfunction in the form of illiquidity and anomalous pricing across many different markets… Among the information gathered through markets monitoring in the fall of 2007 and early 2008, were indications of problems with the accuracy of LIBOR reporting.”
Another interesting tidbit: “The Barclays employee explained 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 Barclays employee did not state that his bank had been involved in manipulating the rate for its own trading advantage.”
The NY Fed data goes back to 2007 and then into 2008, so keep in mind that this has been an internal cross-current in Barclays and in many banks for years.
JON C. OGG