The Impact Of Barclay 's On The United Kingdom

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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.

Barclay’s has an extensive history as one of the oldest banks in the world dating back to the late 17th century. John Freame and Thomas Gould were goldsmiths working in Lombard Street, London. Goldsmiths at the time lent out money to
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Libor, the London Interbank Lending Rate, is considered to be one of the most important rates in finance because trillions of financial contracts utilize this rate. Libor is used globally as a base interest rate in which it is used to set up a range of financial deals. It is also used as measure for financial institutions to gauge their trust level in the financial system and to check each institutions financial health. This rate is determined by a group of leading banks that submit the rates of ten different currencies and fifteen lengths of loans, which range from overnight to twelve months. The most important part is the “three-month dollar Libor”, which is the rate that other banks would borrow from each other for three months. Traders managed to manipulate this rate because the rates submitted are estimates; it would be relatively easy to submit false figures. Traders at several banks conspired to influence the Libor by getting colleagues to submit rates that were higher or lower than their actual estimate.

Libor is an interest rate that is determined by the rates at which banks lend funds to each other on the London interbank market. Every day the banks submit their borrowing costs to the Thomson Reuters data collection service in which an agent calculates out Libor. The agent discards the highest and lowest quarter of submissions and then averages out the remaining rates to calculate out Libor for the day. Barclays manipulated this rate by submitting rates
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