- POSTED: 25 Jul 2014 18:38
- UPDATED: 25 Jul 2014 19:30
Britain's Lloyds Banking Group said on Friday (July 25) that it expects to be fined for its role in the Libor rate-rigging scandal.
LONDON: Britain's Lloyds Banking Group said on Friday (July 25) that it expects to be fined for its role in the Libor rate-rigging scandal.
LBG said in statement that it had noted media coverage regarding potential settlements with a number of government agencies "around the setting of Interbank Offered Rates and other benchmarks".
It added: "The settlements remain to be agreed and LBG expects they will include the payment of penalties."
The Financial Times reported that next week LBG will announce it is paying fines of up to £300 million (US$509 million, 379 million euros) to British and US regulators after it was allegedly found to have manipulated inter-bank lending rates.
The Libor scandal erupted two years ago when British bank Barclays was fined £290 million by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
Euribor is the eurozone equivalent of Libor, and interbank rates are the rates at which banks lend to each other. The Libor rate is a benchmark on which are based vast numbers of financial contracts around the world.
The scandal badly tarnished the reputation of the City of London financial centre.
Royal Bank of Scotland, Swiss lender UBS, Rabobank and broker Icap have also received heavy fines over the scandal.
The Libor system was found to be open to abuse, with some traders lying about borrowing costs to make their bank seem more secure or boost their trading positions.
In the wake of the affair, industry body the British Bankers' Association was forced to give up management of Libor, handing supervision over to stock exchange operator NYSE Euronext.
LBG is meanwhile 25 percent-owned by the British taxpayer after recent reductions to the stake as the bank recovers from a massive state bailout following the 2008 global financial crisis.