U.K. Banks Scrap Black-Tie Dinner as Libor Probe Intensifies
The British Bankers’ Association, the lobby group that oversees the London interbank offered rate, postponed tonight’s annual dinner for the first time following Barclays (BARC) Plc’s record fine for rigging the benchmark.
“In the current circumstances it would be wrong to proceed,” Brian Mairs, a BBA spokesman, said by telephone today. “Our industry needs to think long and hard about its collective behavior and now is not the time for such an event to take place. We regret the short notice.”
The lobby group said it had invited more than 300 guests to the black-tie event at London’s Mansion House. Financial Services Authority Chairman Adair Turner was slated to be the main speaker, with David Wootton, the Lord Mayor of London, set to attend as well. The BBA described the event as “always popular and very well attended” in its invitation.
Barclays, Britain’s second-biggest bank by assets, sparked a political outcry after it was fined about $451 million by the FSA, the U.S. Justice Department and the U.S. Commodity Futures Trading Commission on June 27 for manipulating Libor from 2005 to 2009. U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday that Libor was “structurally flawed” and warranted a “substantial response” from the central bank.
The BBA canceled its summer party earlier this month. BBA Chief Executive Officer Angela Knight, who said in April she would step down, is being replaced by Anthony Browne, a former government-relations executive at Morgan Stanley, in September. BBA Chairman Marcus Agius, who is also planning to resign as chairman of Barclays, stepped down this month.
At least a dozen banks are being probed by regulators worldwide for potentially rigging the benchmark rate for at least $500 trillion of securities. Citigroup Inc., Royal Bank of Scotland Group Plc, UBS AG, ICAP Plc, Lloyds Banking Group Plc (LLOY) and Deutsche Bank AG are among firms regulators are probing.
Bank of England Deputy Governor Paul Tucker told British lawmakers on July 9 that the Libor investigation unveiled a “cesspit” in the City of London. A cross-party parliamentary inquiry led by Andrew Tyrie is examining Libor.
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 one another for 15 periods, from overnight to one year, in different currencies.
A spokesman for the Mansion House wasn’t immediately available to comment. The building is the official residence of the Lord Mayor, who presides over the City of London Corporation, the U.K. capital’s main financial district.
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