Barclays and the LIBOR Scandal Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

In the June of 2012, Barclays plc acknowledged that it had controlled the London Interbank Offered Rate (LIBOR)-a standard interest rate which was essential to the procedure of global financial markets and that was the foundation for trillions of dollars of monetary transactions. Between the years 2005 and 2009, Barclays, among the world's largest and most important banks, manipulated LIBOR to gain and/or profits limit losses from derivative trades. Between 2007 and 2009, in addition, the business had made dishonestly low LIBOR submission rates to dampen market speculation and negative media opinions about the firm's viability during the monetary crisis. In settling with U.K. and U.S. regulators the company agreed to pay $450 million in fines. Within a couple of days of the settlement, Barclays' CEO, Robert Diamond, had stepped down under weight from British regulators. Diamond held responsible a small number of workers for the derivative trading-related LIBOR rate infringements and termed their activities as "reprehensible."

This case explains what Barclays did erroneous, and why was LIBOR an indispensable part of the worldwide financial market, the apparatus used to set up the rate. The case allows for an evaluation of: i) the consequences of violating the trust of marketplace participants, ii) ethnic and leadership flaws at Barclays; iii) the challenge of effectively competing in a market where systemic, and broadly comprehend, dishonesty is taking place, iv) the complicity of regulators in continuous corrupt system; v) what may be, or might not, be successful remedies for the systemic defects in LIBOR.

PUBLICATION DATE: January 02, 2013 PRODUCT #: 313075-HCB-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING