An insider's view
In the tight-knit world of interest rate derivatives and Libor submissions, the bankers know each other by first name, regularly phoning, texting, messaging and emailing. They were ridiculed in the press as crass money-obsessed shallow people.
Their confidence and bonuses knew no bounds at a time when millions suffered in a recession created by greedy bankers, an image that was not helped by the email correspondence made public, for example:• ‘Dude, I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger.' In response to a manipulation of USD Libor.
• ‘When I write a book about this business your name will be written in golden letters.'
‘If you keep the 6s [the six-month yen Libor rate] unchanged today... I need you to keep it as low as possible... if you do that... I'll pay you... I'm a man of my word.'
• ‘It's just amazing how Libor-fixing can make you that much money or lose it if opposite. It's a cartel now in London.'
And from the submitters:
• ‘Always happy to help.'
• ‘Done... for you big boy.'
• ‘You know, scratch my back yeah an all.'
In response to a request to submit a lower Libor:
‘I am going for 90 altho 91 is what I should be posting' [assumption: he is referring to the annualised rate in basis points].
The response from bank leadership was interesting. Here is a quote from The Economist:[19]
Risibly, Bob Diamond, [Barclays] chief executive, who resigned on July 3rd as a result of the scandal, retorted in a memo to staff that ‘on the majority of days, no requests were made at all' to manipulate the rate. This was rather like an adulterer saying that he was faithful on most days.'
The authorities went on the warpath - see Article 8.1.