Financial Biz Review: Libor Scandal EXPLODES, JPMorgan In More TROUBLE
The Libor scandal is going full tilt in the U.K. on Friday. Highlights include a stiff fine, the need for redress and a resignation refusal. The Royal Bank of Scotland (NYSE:RBS) will likely be fined $233 million for its involvement in the manipulation of Libor, reports the Times of London, with other financial firms such as Barclays (NYSE:BCS), HSBC (NYSE:HBC), and Lloyds (NYSE:LYG) under inquiry. The United Kingdom’s Financial Services Authority says that these (and perhaps more) companies will be required to “provide appropriate redress” in cases of mis-selling interest rate swaps to customers, adding that the mis-sales had dealt “severe impacts” on several businesses. Meanwhile, the Bob Diamond drama goes on, as the embattled Barclays CEO remains adamant that he will not step down. However, he must testify before Parliament, and in a letter to that body, he maintains his ignorance of the matter, saying that there exists no evidence that knowledge of the manipulation rose higher than “immediate desk supervisors … When the trader conduct was first discovered … steps were immediately taken to stop it.”.
JPMorgan’s (NYSE:JPM) risk models are under tighter scrutiny, as the Office of the Comptroller of the Currency is now said to have requested assessments of the models, say sources. The models in question are said to measure the ramifications and unintended consequences of everything from trading losses to interest-rate moves.
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