NY, other states reach $100M settlement with Barclays Bank

Barclays Bank has agreed to a settlement in the United States over allegations it improperly set key interest rates

British financial giant Barclays Bank PLC on Monday reached a $100 million settlement with 44 U.S. states and the District of Columbia over interest rate manipulation in the financial crisis era. This is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers.

Barclays, which cooperated with the probe, is the first of several banks under investigation by the states to resolve claims, New York Attorney General Eric Schneiderman said. The false submissions benefit Barclays by keeping its borrowing rates low during the crisis.

NY and CT led the working group of State Attorneys General investigating Barclays.

Barclays was fined £290m in 2012 by regulators in the United Kingdom and USA for Libor-rigging and the fall-out claimed the job of then chief executive Bob Diamond.

Three years after that deal was reached, Barclays agreed to pay an additional $60 million criminal penalty for violating the non-prosecution agreement it signed. Investigations are continuing into the actions of several other banks. The investigation was led by the attorneys general offices in NY and CT.

"We believe this settlement is in the best interests of our shareholders and clients, and allows us to continue to focus on the future and serve our clients", the bank said in an e-mailed statement.

Governmental and not-for-profit entities with LIBOR-linked swaps and other investment contracts with Barclays will be notified if they are eligible to receive restitution from a total settlement fund of $93.35 million. For example, the attorney general statement's stated that, between 2005 and 2009, traders at the bank would ask Libor submitters to put forward a rate which favoured their trading position.

"At times, those requests came from traders outside the bank, and Barclays traders agreed to pass them along to Barclays' submitters, thus colluding with other banks", unusual said in a statement.

They added the rest will cover the costs of investigation and administration.

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