$1.4 bil fine for UBS in the LIBOR scandal. The level of rigging considered considerably more serious than those made of Barclays.
In their contender with "Done for you, Big Boy", UBS preferred to use Superman, Three Muscateers and Captain Caos.
""if you keep 6s [i.e. the six month Japanese yen Libor rate] unchanged today … I will f**king do one humongous deal with you … Like a 50,000 buck deal, whatever … I need you to keep it as low as possible … if you do that … I'll pay you, you know, 50,000 dollars, 100,000 dollars … whatever you want … I'm a man of my word". Illicit fees of more than £170,000 were generated for the broker
FSA document here, for those that like to read this kind of thing. This time we get up to Panel Bank 5 in the accusation (the three muscateers) - this is going to carry on getting ugly.
Anyone ever not realize that instant messages on external systems stick around? I think UBS got hit harder based on the amount of evidence plus senior management appeared to be complicit, whereas at Barclays that didn't seem the case.
This is just a brilliant find:
Manager D: “here is a mind fuck for you. If we are doing CP at 2.81% and
that is 3m usd libor + 10, why aren’t we putting our 3m rate in
at 2.81% for libors”
Manager C: “we should”
Manager D “but then GT [i.e. Group Treasury] will rip our boys a new one for being the highest bank in the poll”
During a discussion in a public chat group with 58 participants on 25 June 2009, Trader-Submitter C openly solicited several colleagues for Internal Requests in respect of EURIBOR submissions. Later on the same day, in a private chat Manager D said to Trader-Submitter C: “JUST BE CAREFUL DUDE”. Trader-Submitter C replied: “i agree we shouldnt ve been talking about putting fixings for our positions on public chat”.
So RBS fine is bigger than Barclays as well, with Deutsche almost certainly larger as well (five traders suspended and sheer scale in the market make it likely).
Barclays seem to have made a really bad decision going first. No one else has lost their CEO.
I just noticed Tubby's comments up thread. I don't think regulators are picking on UK banks. There is clearly going to be six or so cases... Deutsche is clearly going to get fined and then it is a guessing game on the others. I would be surprised if a US bank isn't on the list of the other Panel Banks involved.
It's also worth noting that RBS is the only one of the non-US panel banks that has a US retail network (due to its acquisition of Citizens Bank). I happen to think that that fact was not irrelevant to the DoJ's decision to insist on a criminal plea from their subsidiary.
The relatively small portions of these fines that are going to the British fisc via the FSA are rather striking, and illustrate weaknesses in the UK regulatory regime.
"A British bank is run with precision. Tradition, discipline and rules must be the tools! Without them: disorder... catastrophe! Anarchy! In short, you have a ghastly mess!"
So, Robert Peston was on Radio 4 the other morning saying that, pretty much whatever happens, we will have lost £10 billion on RBS? The bank where 200% bonuses are being asked for (not by the poor bastards on the counters). Hold on, if the Scots bugger off, do they take it with them?
I'm surprised that the Lloyds Bank staff bonuses story is news, to be absolutely honest. I know of someone - a friend of a friend - who did that at another major high street bank for years (and quite likely still does).
The - really fucking obvious - moral of that story is that the pursuit of money in that way is a corrosive influence on all involved in it. My sister used to be a branch manager for the in central London. She quit because it "all became about targets and selling products." Twenty years ago.
I am not able to get beyond a 'meh' reaction to the article. None of the findings of speaking to folk off the record / under Chatham House rules are surprising. It is a question of how you can actually reach a more stable banking system. Seven years on it just doesn't seem very insightful at all, beyond what you could have written five years ago at least.
In some ways the SIFI designation is starting to drive some of the change they are looking for. It remains a question as to whether it will get there.
I suspect your "meh" is due to the fact that you are more familiar with the details of this stuff on an ongoing basis than the typical reader at whom the article was aimed, caja. I think it's a good article for the general reader (who can't be expected to be on top of issues just because the analysis has been available for a few years already). I don't think it was aimed at an expert or specialist audience.
Another intriguing longread I recall on the systemic bank risk and related public policy problem was an LRB piece by John Lanchester, whose main point, I recall, was that the capital requirements (equity to debt ratios) of the banks should be jacked up hugely, as they are currently set, internationally, at levels which seems mainly driven by the banks' hunger for gearing and profit and less by objective public risk-benefit analysis.
Several hours and about a case of beer later, Zeines and Hurwitz are giving a tour of the six-bedroom house. Zeines heads into his bedroom to show off the harbor view, but inside it’s dark. His two girlfriends have been fighting over the blinds, he says; one insists on blocking out the sun. Down the hall, Hurwitz produces a leather whip from a bedside drawer. When he shows it to the women he brings home, he says, they’re frustratingly blasé: “Maybe that’s just what they expect from a guy with a house like this.”
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