Down the rabbit hole: The Barclays scandal grows

The scandal at Barclays continues to grow as emails dating back to 2005 attest to a pattern of greed and corrupt business practices. What is not well known is what the final cost could be to the world's financial institutions, and these costs could be enormous.

  • close
    London bikes sponsored by Barclay's bank are seen at a docking station in central London in this July 2012 file photo. The chairman of Barclays bank announced his resignation Monday, accepting responsibility for a rate-fixing scandal and leaving the chief executive to face growing demands that he step down, too.
    Lefteris Pitarakis/AP
    View Caption
  • About video ads
    View Caption

The mechanics of how Barclays traders were able to manipulate a rate that was the benchmark for some $800 trillion in loans and borrowings are by now well-known.  And documented, they have emails going back to 2005 right up through the present.

What is not well known is what the final cost could be to the world's financial institutions.  It is starting to become apparent that these costs could be enormous.

From The Economist:

Corporations and lawyers, too, are examining whether they can sue Barclays or other banks for harm they have suffered. That could cost the banking industry tens of billions of dollars. “This is the banking industry’s tobacco moment,” says the chief executive of a multinational bank, referring to the lawsuits and settlements that cost America’s tobacco industry more than $200 billion in 1998. “It’s that big,” he says...

As many as 20 big banks have been named in various investigations or lawsuits alleging that LIBOR was rigged. The scandal also corrodes further what little remains of public trust in banks and those who run them.

Regulators around the world have woken up, however belatedly, to the possibility that these vital markets may have been rigged by a large number of banks. The list of institutions that have said they are either co-operating with investigations or being questioned includes many of the world’s biggest banks. Among those that have disclosed their involvement are Citigroup, Deutsche Bank, HSBC, JPMorgan Chase, RBS and UBS.

For the whole picture of how widespread this manipulation may have been, I highly recommend reading the whole piece.  Make popcorn.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.To add or view a comment on a guest blog, please go to the blogger's own site by clicking on


We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.