The global banking scandal into FX and benchmark fixing has taken another turn as of late, this time via a recent announcement out of Lloyds Banking Group Plc that a trader has been suspended following allegations of benchmark manipulation of Libor rates, according to a Bloomberg statement.
Delayed Response out of Lloyds Bank
Lloyds bank has been relatively quiet on the Libor front as other leading entities such as Deutsche Bank, UBS AG and Credit Suisse have been under siege by a multi-thronged probe into currency and benchmark fixings. The announcement comes following a rather lengthy delay given the actual suspension of Mark Sinfield, a GBP rates trader out of London, occurred nearly three months ago.
Lloyds cited the timing of the response as part of an established protocol on employee policy, especially given a sizable portion (33%) of government ownership. Lloyds is one of many banks presently under investigation by a panel of global regulators – to date there have been record fines doled out along with a plethora of suspensions already with seemingly no end in sight. The Libor investigation has consequently suspended three traders in prior months at Lloyds, with two already returning to active work. The depth and scope of the investigation, as well as the deteriorating results unturned by regulators being revealed, have called into question whether such manipulation can be avoided or curbed in the future, given a particularly flawed system.
US Regulator Overseeing Libor and Forex Probe Steps Down
On the investigatory side of the probe, the US Justice Department has released a statement announcing that Mythili Raman, the prospector who has overseen the Libor and FX probes to date in the US will be stepping down – her replacement pending Senate approval.
According to Paul McNulty, Former Deputy Attorney General in a recent interview with Bloomberg, “Her exit probably won’t slow prosecutions because other supervisors can handle the work. You hate to lose someone with her experience and capability because it really is extraordinary but things do go on without that person.”
“Being part of launching and overseeing this enormous investigation has been a unique professional experience and I think a really important point of financial enforcement for the department,” Raman added in a recent statement, following her role in an investigation of historic proportions, centering on a $5.3 trillion dollar industry.
