The long wave of the financial scandal involving the Anglo-Saxon world has hit another excellent pawn of the financial giant Barclays: the managing director Bob Diamond he resigned today, a day before reporting to the chambers on the interest rate manipulation that has allegedly involved British finance in recent years.
Barclays had already been fined £290m last week for recurring attempts to manipulate the Libor, the interbank interest rate at which mortgages are indexed in England, but also in other countries.
Marcus Agius, chairman of Barclays, announced yesterday that he would also step down from his post, but will remain in his post for now with the aim of hiring a new chief executive. The search will begin immediately and both internal and external candidates will be considered.
However, Diamond may not be the last: according to the Financial Times, other heads could fall in the next few days.
The manipulation of the Libor has opened Pandora's box, bringing to light the lack of transparency of the financial management of large international groups.
The artificial adjustment of interest rates is in fact a serious and significant one market manipulation, to the detriment of competing banks and consumers: "rigging" an interbank interest rate involves an increase in costs for consumers who have taken out a real estate mortgage or a consumer loan in a certain currency.
Many contracts, if at a floating rate, are indexed to the interbank rate of the reference currency zone: the Euribor for the eurozone and the Libor for Great Britain.
The Libor is estimated daily, and is calculated on the basis of the declarations of the individual banks, which communicate the interest rate at which they are willing, day by day, to borrow money from other institutions. Both the highs and lows are discarded, and the Libor rate is calculated on the average of the remaining values.
Barclays would have manipulated upward daily communications, launching a distorted message to the markets: being able to bear an interest rate higher than the really manageable one is equivalent to publicizing overestimated profit prospects, therefore reassuring the counterparties on the solvency of the institution, obtaining more favorable market conditions whose however, the cost is passed on to those consumers who have taken out loans indexed to the reference interbank rate.
And it's not just the case for British families: Libor is also frequently used in other countries to index mortgages, replacing Euribor if the latter is not available and updated at the time the contract is stipulated.
