The British Bankers’ Association, the U.K. group that oversees the publication of London interbank offered interest rates, canceled a party scheduled for this week following the record fine against Barclays Plc for manipulating the benchmark.
“We regret the short notice but our industry needs to think long and hard about its collective behavior,” Angela Knight, the BBA’s chief executive officer, said in a memo obtained by Bloomberg News. “We believe that in the current circumstances it would be wrong to proceed with the reception on Wednesday evening.”
Barclays, Britain’s second-biggest bank by assets, sparked a political outcry after it was fined $451 million by the Financial Services Authority, the U.S. Justice Department and the U.S. Commodity Futures Trading Commission on June 27 for manipulating Libor between 2005 and 2009. Marcus Agius, the chairman of Barclays and the BBA, resigned from both posts today, saying he was “truly sorry.”
Libor is derived from a survey of banks conducted each day on behalf of the BBA in London. Lenders are asked how much it would cost them to borrow from each other for 15 different periods, from overnight to one year, in currencies including dollars, euros, yen and Swiss francs. After a set number of quotes are excluded, those remaining are averaged and published for each currency by the BBA before noon.
Brian Capon, a spokesman for the BBA, confirmed the event was canceled. The party was a two-hour summer reception at College Garden near London’s Westminster Abbey.
The U.K. finance regulator has “a number of investigations concerning Libor” beyond the case that resulted in a record fine levied against Barclays Plc last week, the agency’s acting head of enforcement said.
Barclays put “the interest of the bank and its traders” ahead of customers, Tracey McDermott said in a speech today.
Knight said in April she would step down as CEO of the BBA. The lobby group last month named Anthony Browne, a government relations executive at Morgan Stanley, as her replacement. Agius said today he would step down as chairman of the BBA with immediate effect.
Citigroup Inc., Royal Bank of Scotland Group Plc, UBS AG, ICAP Plc, Lloyds Banking Group Plc and Deutsche Bank AG are among the firms regulators are investigating. A total of 18 banks are surveyed as part of the process of determining Libor and related rates.