Barclays : Libor Scandal And Reforms Essay

The LIBOR manipulation took place during economic upswing (2005-2009) and global recession (2007-2009). Before crisis the rates were manipulated on the both sides, lower and upper. The traders requested to increase as well as to decrease the rate depending on their bets. If the traders managed to get the rates higher before the financial crisis then the consumers suffered.

Barclays is a British multinational bank and finance services company founded in London. It operates in retail, wholesale and investment banking, wealth management, mortgage lending and credit cards. It is found in over 50 countries and territories and has around 48 million clients around the globe. Its total asset is US$2.42 trillion as of December 2011 and is the seventh-largest of any bank worldwide.

Barclays envisions itself as a leading transatlantic bank. It aims to generate sustainable value for its shareholders by emerging as one of the biggest consumer, corporate and investment banks catering some 24 million customers in the Personal, Wealth and Business Banking domains. Barclays aims to achieve this through its two business divisions namely Barclays UK and Barclays International. Following are some key strategic aims and objectives of the Group.

Canadian Imperial Bank of Commerce or CIBC as most know it, has been operating since 1867. They are a profit corporation that offers public banking and financial services to individuals, small businesses, and also other corporations. CIBC is a Canadian corporation that has branched out and now does business in Europe, Asia, Australia, Latin America, and of course The United States (Wikipedia).

An article appearing in the Finance and Economics section of The Economist print edition with the headline ‘‘Turn of the wheel’’ discusses the Treasury proposing measures of cutting red tape. The article notes after President Trump assumed office, he vowed to restructure the elephantine law which had recast financial regulation following the 2007-08 crisis. Thus, he asked Steven Mnuchin, the Treasury secretary to measure all the rules of America against 7 broad principles, bail-outs prevention by taxpayers as well as instituting more efficient regulations inclusive. Mnuchin provided a report on banks where he proposed installments to cover capital markets, asset, and insurance management together with financial

This report will capture the various way each primary external factors influences the growth and performance of Barclays bank in the financial sector.

1) There were many individuals that benefitted from the manipulation of LIBOR. The Barclays derivatives traders, Money Market Desk, Bob Diamond and senior management and other banks all had some sort of gain from the LIBOR scandal.Let’s start with the people that had the most monetary gain - the Barclays derivative traders. It is said that LIBOR has been manipulated since the early 90s. Since then, there has been trillions of money made by derivate traders as they influence LIBOR. The traders communicated with the Money Market Desk, the individuals who submitted LIBOR rates, in order to manipulate the rate to their favour. In fact, the investigation found the derivate traders were not

The Scotiabank is one of the world’s most popular banks in North America and is located in Canada, Halifax. Founded in 1832, Scotiabank came to be the second largest bank in Canada. A year after its development, Scotiabank paid out its first dividend to shareholders. Having marked the method in history, it was carried out through the golden era to the modern era and is yet continued to this day. Scotiabank provides innovative financial products and services to individual customers, small/medium sized business, corporations and governments across the world.

Barclay’s over its long history has grown into one of the largest financial groups in the United Kingdom3. Since there early start in banking, Barclays has since then diversified itself into investment banking, and investment management as well. They operate over 850 branches in over 60 countries in which 2000 are based in the United Kingdom3. “The company has over 4.5 million registered online bankers and over 10.6 million Barclaycard customers in the United Kingdom”3. Barclay’s is currently the 7th largest bank in the world with assets valuing $2.41 trillion.

CITIGROUP: Citibank is a worldwide leading firm in the financial services industries. Born in 1998 from the fusion of Citicorp and Travelers Group, in 2005 resulted the third strongest firm in terms of market capitalization, the biggest in terms of assets and one of the “Big Four banks” of the United

Barclay’s has grown into one of the largest financial groups in the United Kingdom. The company has diversified itself and is involved with banking, investment banking, and investment management. They operate over 4750 branches in 50 countries in which 1600 are based in the United Kingdom. The company has over 4.5 million registered online bankers and over 10.6 million Barclaycard customers in the United Kingdom. Barclay’s is currently the 7th largest bank in the world with assets valuing $2.41 trillion.

Further, Government intended to reform Barclays management and operation, but Middle Eastern focused on the opportunity to profit. Therefore, it is wise to accept Middle Eastern offer. Lastly, cooperating with Middle Eastern investors might lead Barclays expend to Middle Eastern area and increase commercial opportunities.

Barclays is a major global financial services provider engaged in retail banking. Bar-clays is organised within these business clusters: Corporate and Investment Banking, Wealth and Investment Management; and Retail and Business Banking. The Corporate and Investment Banking, Wealth and Investment Management cluster comprises three business units: Corporate banking; Investment banking; and Wealth and investment management. The Retail and Business Banking cluster comprises four business units: Africa Retail and Business Banking (including Absa Group); Barclaycard (credit card and loan provision); Europe Retail and Business Banking; and UK Retail and Business Banking.

Prime rate in July 2015 is at 3.25% and LIBOR (London Interbank Offered Rate) is approximately 0.81%. Depending on the bank or financial institution a company borrows from will determine which index is used. Regardless, companies will pay approximately the same based on their riskiness to the bank as determined by the banks’ underwriters.

Indian law imposes both civil as well as criminal liability on corporations. Criminal liability, was earlier not associated with corporates due to the absence of mens rea and Indian Courts were of the view that corporations could not be criminally prosecuted. However the case of Standard Chartered Bank and Ors. vs Directorate of Enforcement [(2005) 4 SCC 530] held that corporations are liable for criminal offenses and can be prosecuted and punished, at least with fines and settled the position of law regarding the criminal liability of a corporation. Further, the newly enacted Companies Act, 2013 (“Companies Act”) has not only expanded the definition of “officer in default” but also enlarged the corporate governance requirements. The Companies Act has also amplified the circumstances under which, if the obligations cast on the corporation are not complied with, the company and its officer in default could either be fined or imprisoned. There are other prevalent statutes such as the Environment Protection Act, 1986, the Industrial Disputes Act, 1947, Water (Prevention and Control Pollution) Act, 1974 which lay down provisions and circumstances under which companies can be prosecuted. Under these statutes, when a ‘person’ committing an offence is a company, or other body corporate, every officer or person concerned with or in charge of the management shall, unless he proves that the offence was committed without his knowledge or consent, be deemed to be guilty of