Lloyds sacks 8 after rate-fix probe
Lloyds Banking Group has fired eight members of staff and withheld bonuses worth £3m (€3.83m) as part of disciplinary action taken in the wake of July’s revelations about rate-fixing.
However, the group has been unable to take any action against a number of individuals who had already left the bank prior to the bank’s £218m (€278.54m) settlement with UK and US regulators.
As well as the interbank lending rate Libor, the bankers manipulated the benchmark repo rate, which was used to calculate fees due to the Bank of England for its support in the financial crisis.
Lloyds said it has shared all relevant information with City regulator the Financial Conduct Authority and other relevant authorities.
In July, Bank governor Mark Carney described the actions of Lloyds between 2006 and 2009 as “highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved”.
Lloyds said unvested bonuses and long term incentives totalling around £3m (€3.83m) in aggregate for the fired individuals will be forfeited.
Chairman Lord Blackwell said the significant reputational damage and financial cost to the group will also be reflected in the options considered in relation to other staff bonus payments.
He said: “The board has been clear that it views the actions of those responsible for the misconduct referred to in the settlements as being completely unacceptable.
“It is entirely right that the group undertook a prompt, independent and thorough disciplinary process immediately after the settlements were announced and has taken appropriate action as a result. A number of individuals have been dismissed.”
Libor rigging took place between May 2006 and June 2009, with 16 individuals directly involved, seven of them managers – including one who was also involved in the repo misconduct.
The FCA fined Lloyds £105m (€134.15m), including £70m (€89.43m) for its attempts to rig the Special Liquidity Scheme (SLS) – the taxpayer-backed scheme to support UK banks during the financial crisis.
The rest of the fine related to the manipulation of Libor, the benchmark interest rate used in hundreds of trillions of dollars worth of loans and transactions from complex derivatives to mortgages.
Part of the Libor misconduct came after pressure from a manager over market perception of its financial stability during the financial crisis, the FCA found, as well as attempts to boost trading positions.
Chief executive Antonio Horta-Osorio said the bank had taken steps to prevent the same kind of behaviour happening again.
He added: “The changes we have implemented over the last three years as part of our successful customer-focused and UK-centric strategy have created a culture and values that focus totally on our retail and commercial customers.”
