Barclays Scandal: Libor
From Amanda Chua, Financial Manager
To Sir David Walker, Chairman of Barclays Plc.
Date 24th February 2013
Subject Implication of The Recent Libor-Fixing Scandal for Barclays Bank
1. Executive Summary * The London Interbank Offered Rate (Libor) is the average interest rate charged to banks for lending funds in the interbank market (Investopedia n.d.). * The UK Treasury reported that Libor is responsible for an estimated $300 trillion worth of financial transaction (BBC 2012). * Barclays’ traders submitted inappropriate rates upon derivative traders request (FSA 2012). * Barclays’ submitted inappropriate rates to prevent negative media attention (FSA 2012). * Barclays was fined £290 million for Libor scandal (Wilson 2012). * Former Chairman, CEO and COO resigned in July 2012 (BBC (B) 2013). * Barclays’ share prices fluctuated due to Libor Scandal (Fletcher 2012). * Pursuing profit maximization, Barclays inevitably exploited its stakeholders (MBA Knowledge Base n.d.). * Financial managers think solely for the purpose of profit maximization for the shareholders as it lose focus, carrying out unethical behaviors to gain short-term gratification. * Barclays is suggested to create shareholder value by combining a well-thought-of goal with focused financial planning that will deliver returns to shareholders but in an ethical manner that is acceptable by the society (Barclays Boss Lays Out Revival Plans, 2013). * Installation of more advanced surveillance devices further enforces plan as employees are monitored closely in efforts to control the wellbeing of the workers (Roland 2013). * Barclays is suggested to form a neutral ring-fenced rate-setting unit to monitor the rates submission (Daniels 2013). 2. Libor: Explained
The London Interbank Offered Rate (Libor) is the average interest rate charged to banks for lending funds in the interbank market (Investopedia n.d.).
Major banks in London who are under BBA
To Sir David Walker, Chairman of Barclays Plc.
Date 24th February 2013
Subject Implication of The Recent Libor-Fixing Scandal for Barclays Bank
1. Executive Summary * The London Interbank Offered Rate (Libor) is the average interest rate charged to banks for lending funds in the interbank market (Investopedia n.d.). * The UK Treasury reported that Libor is responsible for an estimated $300 trillion worth of financial transaction (BBC 2012). * Barclays’ traders submitted inappropriate rates upon derivative traders request (FSA 2012). * Barclays’ submitted inappropriate rates to prevent negative media attention (FSA 2012). * Barclays was fined £290 million for Libor scandal (Wilson 2012). * Former Chairman, CEO and COO resigned in July 2012 (BBC (B) 2013). * Barclays’ share prices fluctuated due to Libor Scandal (Fletcher 2012). * Pursuing profit maximization, Barclays inevitably exploited its stakeholders (MBA Knowledge Base n.d.). * Financial managers think solely for the purpose of profit maximization for the shareholders as it lose focus, carrying out unethical behaviors to gain short-term gratification. * Barclays is suggested to create shareholder value by combining a well-thought-of goal with focused financial planning that will deliver returns to shareholders but in an ethical manner that is acceptable by the society (Barclays Boss Lays Out Revival Plans, 2013). * Installation of more advanced surveillance devices further enforces plan as employees are monitored closely in efforts to control the wellbeing of the workers (Roland 2013). * Barclays is suggested to form a neutral ring-fenced rate-setting unit to monitor the rates submission (Daniels 2013). 2. Libor: Explained
The London Interbank Offered Rate (Libor) is the average interest rate charged to banks for lending funds in the interbank market (Investopedia n.d.).
Major banks in London who are under BBA
Bibliography: ACTUELNEWSCHANNEL. 2013. Barclays Boss Lays Out Revival Plans [online]. [Accessed 22 February 2013]. Available from: http://www.youtube.com/watch?v=4dznoD8yd14 ARMOUR, J