Banks reportedly rigged interest rates

Evidence suggests that regulators in the UK and US were aware of a state-led effort to manipulate interest rates during the 2008 financial crisis but chose to conceal it. Documents reveal that under pressure from central banks, lenders significantly lowered their interest rate estimates. However, this evidence was not presented in the trials where bankers were convicted for smaller-scale interest rate manipulation. Regulators have either declined to comment or rebutted the claims, while some evidence points to the involvement of the Bank of England, the UK government, and other central banks in pushing down key interest rates globally.

The evidence indicates that in October 2008, central banks including the Bank of England, Banque de France, European Central Bank, Banca d’Italia, Banco de Espana, and the Federal Reserve Bank of New York intervened on a large scale in setting Libor and Euribor rates. While publicly encouraging calm during the financial crisis, these central banks were secretly taking measures to artificially restore stability, which would later be deemed unlawful in the UK. Libor and Euribor rates significantly influence the cost of mortgages and loans, and the confidence in banks affects these rates.

The suppressed evidence shows that central banks collaborated internationally to manipulate interest rates, with the UK, US, and eurozone all involved in an effort to lower Libor rates and restore market confidence during a time of limited bank lending. Despite informing investigating agencies about these activities in 2010, the evidence was concealed from Parliament, Congress, and the public. This revelation raises concerns about potential misinformation provided to the Treasury Committee and the need for stronger information-gathering powers in Parliament.

The evidence supporting the cover-up includes a recorded interview between FBI investigator Mike Kelly and Peter Johnson, a Barclays cash trader who submitted Libor rates on behalf of the bank. Johnson revealed that he was instructed by his superiors to submit artificially low Libor rates under pressure from the Bank of England and the UK government. Additional evidence suggests that the UK government, including 10 Downing Street, also played a role in pressuring banks to manipulate Libor rates, disregarding proper procedures. However, this evidence was not disclosed to regulators and juries during the trials related to interest rate manipulation.

There are calls for a fresh investigation into the matter, with concerns raised about potential perjury and the misleading of Parliament. The evidence indicates a coordinated effort by central banks to manipulate interest rates during the financial crisis, but this information was kept hidden. The European Central Bank has strongly refuted the claims, stating that they adhere to their mandate and applicable laws. Similarly, Italian bank Intesa Sanpaolo has maintained that it acted independently and in compliance with rate-setting regulations.