Seven of the world's biggest banks have received court orders from regulators in the United States investigating what role they may have played in the Libor rate-fixing scandal.
The seven lenders are HSBC, Citigroup, JPMorgan Chase, UBS, Royal Bank of Scotland, Deutsche Bank and Barclays Bank.
Libor, or the London interbank offered rate, is used as a benchmark for trillions of dollars of financial products, from the prosaic mortgage loan to syndicated debt, corporate bonds and complex derivatives. And although Libor is based in London, the rate is referenced by financial products throughout the world.
Bloomberg News reported yesterday the attorneys-general of New York and Connecticut are jointly investigating the alleged manipulation of London rates, following investigations by British and US regulators this summer. The seven banks declined to comment on the latest revelation.
While the move is a small step forward in what is likely to be a long process of evidence-gathering, it nevertheless raises the potential of future fines, said Ian Gordon, the head of banks research at Investec Securities.
"For me, all this does is convince me further that the market was wrong to obsess over Barclays when they announced their settlement at the end of June," he said.
Barclays paid a total of US$453 million (Dh1.66 billion) in fines that month to settle an investigation by US and UK regulators, sparking a scandal that forced the resignation of Bob Diamond, the bank's chief executive and two other top executives. Regulators accused Barclays of colluding with other banks' trading desks to rig Libor rates to generate higher profits on trades of selected financial instruments.
The bank also lowered its Libor submissions to deflect the impression that it was facing funding difficulties at a later stage in the financial crisis, it is claimed.
Barclays said out of 2,000 traders, 14 were at fault and criminal proceedings were now taking place against them.
In the meantime, interbank lending rate panels in Hong Kong, the United Kingdom, Japan, Denmark and Singapore have been reshuffled as banks reassess their role.
Three of the banks issued with subpoenas also play a role in setting benchmark lending rates in the Middle East. Barclays has already asked to withdraw from the UAE's Central Bank panel, which sets the Emirates interbank offered rate, or Eibor, and is due to step down in October.
HSBC and Citigroup both sit on the Eibor panel, while Saudi British Bank, 40 per cent owned by HSBC, is also a member of the Saudi interbank offered rate selecting panel, or Saibor.
The impact of Eibor on the prices of financial products in the UAE is difficult to gauge, said Shabbir Malik, a financial analyst at EFG Hermes.
"Some banks use their own internal rates when they priced in loans and don't use Eibor as a benchmark," he added.
ghunter@thenational.ae
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Killing of Qassem Suleimani
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
The%20Hunger%20Games%3A%20The%20Ballad%20of%20Songbirds%20%26%20Snakes
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Hili 2: Unesco World Heritage site
The site is part of the Hili archaeological park in Al Ain. Excavations there have proved the existence of the earliest known agricultural communities in modern-day UAE. Some date to the Bronze Age but Hili 2 is an Iron Age site. The Iron Age witnessed the development of the falaj, a network of channels that funnelled water from natural springs in the area. Wells allowed settlements to be established, but falaj meant they could grow and thrive. Unesco, the UN's cultural body, awarded Al Ain's sites - including Hili 2 - world heritage status in 2011. Now the most recent dig at the site has revealed even more about the skilled people that lived and worked there.
Leap of Faith
Michael J Mazarr
Public Affairs
Dh67
SPEC%20SHEET%3A%20NOTHING%20PHONE%20(2a)
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Off-roading in the UAE: How to checklist
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
The specs
Engine: 3.0-litre six-cylinder MHEV
Power: 360bhp
Torque: 500Nm
Transmission: eight-speed automatic
Price: from Dh282,870
On sale: now
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5