The Financial Conduct Authority says it is the joint third highest fine it (or its predecessor the FSA) has issued.
The regulator says £70m of the fine relates to attempts to manipulate the fees payable to the Bank of England for the firms’ participation in the Special Liquidity Scheme, set up to support struggling banks during the financial crisis.
The £35m which relates to Libor is the seventh fine handed out over LIBOR rigging, and the regulator says while the bank’s Libor-related misconduct is similar to that by other banks, the manipulation the rate at which the central bank lends to banks – the repo rate – has not been seen before.
FCA director of enforcement and financial crime Tracey McDermott says:
“The firms were a significant beneficiary of financial assistance from the Bank of England through the SLS. Colluding to benefit the firms at the expense, ultimately, of the UK taxpayer was unacceptable. This falls well short of the standards the FCA and the market is entitled to expect from regulated firms.
“The abuse of the SLS is a novel feature of this case but the underlying conduct and the underlying failings - to identify, mitigate and monitor for obvious risks - are not new. If trust in financial services is to be restored then market participants need to ensure they are learning the lessons from, and avoiding the mistakes of, their peers. Our enforcement actions are an important source of information to help them do this.”
