Deutsche Bank has just been hit with a $2.5 billion fine for manipulating Libor, the interbank lending rate that is linked to trillions of dollars of financial contracts.
As part of the investigation, US regulators trawled through years of chats between U.S. Dollar Libor submitters and traders to show how common manipulation had become.
Today they published some examples of the kind of misconduct they found.
COULD WE PLS HAVE A LOW 6MTH FIX TODAY OLD BEAN?
Asked a London trader who may or may not have been Bertie Wooster.
The New York guys were more, erm, direct...
Subject: $ lsbors unch
Oh bulls**t…..strap on a pair and jack up the 3M.
But overall, there seemed to be little to suggest that the people involved in the Libor scandal considered what they were doing to be particularly illegal at all.
Arranging Libor was based on building a consensus around a number that suited as many people as possible. It looks like the only reference to market prices was the prices the traders needed to get in the near future.
I JUST WANT TO CHECK WHETHER WE HAVE CONFLICTING INTERESTS IN THE JUNE 06 SETTLEMENT. IT DOESN'T MAKE SENSE IF WE TRY TO PUSH ONE WAY AND U WLD LIKE TO HAVE IT THE OTHER WAY AROUND. WE WLD PREFER A LOW 3ME FIXING TO PUSH JUNE06 HIGH. IS THIS UR PREFERENCE AS WELL?
THX VM FOR CHECKING [Frankfurt Euro Desk Manager] - YES WE WOULD PREFER A LOW FIXING AS WELL
THX [London MMD Manager], THAT WILL MAKE US MORE POWERFUL IN PUSHING THE FIX WE WANT IT.
In the U.K., the Financial Conduct Authority has also published quotes as part of its settlement with Deutsche Bank.
If some people didn't like each other, it could make getting the right price difficult.
External Trader A engaged in the following conversation:
Manager B: “man, will you call [Panel Bank 2], please?”
External Trader A: “yes, and [Panel Bank 3]”
Manager B: “don’t tell them that it’s for me, because they hate me”
External Trader A: “of course not”
Manager B: “I am beeeeeeeeeegging you”
The submitter at Panel Bank 1 replied to Trader A saying
I had not forgotten. The brokers are going for 3.372, we will put in 36 [3.36] for our contribution
When Manager B was sent a copy of Panel Bank 1's response by Trader A, everything got a little emotional:
Manager B replied: “I love you”.
Full FCA transcripts are here.