[ by Howard Haykin ] Reaction to Wednesday's announced fines against Barclays of $453 million, over its alleged involvement manipulating Libor, a global interest rate benchmark, was swift and retributive.  In Thursday trading, BCS shares closed down at $10.84, off 12% from Wednesday's $12.33 close.  Shares traded as low as $10.15, or nearly 18% below Wednesday's close. But keep this in mind - investigators in the U.S., Europe, and Asia have been probing alleged wrongdoing in the interest-rate-setting process for about 2 years, and a host of global banks appear to be tied in.  Perhaps the one unfortunate aspect for Barclays is that it served as a message case.  And, it was critical that regulators got this settlement - if not, there might not have been a "tomorrow" for this comprehensive investigation.  Moral: It never helps to be the first one caught. It's probable that the next banks that agree to settle similar charges will have it easier - but who really ever knows how these things shake out.  At least, those banks that follow will will have a benchmark from which to negotiate.  And they'll regulators who will not be as 'rabid' - yes, they'll want to draw blood from their target banks, but it may not be a necessity. Many Ongoing Investigations Worldwide;  No Shortage of Target Banks. Would it come as a shock to know that the Barclays lawsuit comes on the heels of numerous governmental investigations regarding LIBOR.

The numbers are 7 - 10- 21. Ongoing investigations are being conducted in no fewer than 7 countries, by 10 different governmental agencies, involving at least 21 banks.

Countries: (i) the United States; (ii) Switzerland; (iii) Japan; (iv) United Kingdom; (v) Canada; (vi) the European Union; and, (vii) Singapore. Different governmental agencies, including: (i) the U.S. Department of Justice; (ii) the Securities and Exchange Commission, (iii) the Commodities Futures Trading Commission;  and, (iv) Britain's Financial Services Authority. Banks that have been implicated, or their employees or agents have been implicated:  numerous employees, including supervisors, traders, and brokers, from various financial institutions have been accused of improper conduct related to LIBOR.  The defendants - banks that served on the U.S. dollar LIBOR panel of the BBA during the alleged conspiracy and their corporate affiliates, are: (i) Credit Suisse Group AG;  (ii) Bank of America Corporation;  (iii) Bank of America, N.A.;  (iv) JP Morgan Chase & Co.;  (v) JP Morgan Chase Bank, N.A;  (vi) HSBC Holdings plc; (vii) HSBC Bank plc; (viii) Barclays Bank plc;  (ix) Lloyds Banking Group, plc;  (x) WestLB AG;  (xi ) Westdeutsche Immobilienbank AG;  (xii) UBS AG;  (xiii) The Royal Bank of Scotland Group plc;  (xiv) Deutsche Bank AG;  (xv) Citibank NA;  (xvi) Citigroup Inc.;  (xvii) Coöperatieve Centrale Raiffeisen Boerenleenbank B.A.;  (xviii) The Norinchukin Bank;  (xix) The Bank of Tokyo-Mitsubishi UFJ, Ltd.;  (xx) HBOS plc; and, (xxi) Royal Bank of Canada. Regarding the Barclays investigation, ... the CFTC filing said the wrongful conduct at Barclays lasted at least four years and "at times occurred on an almost daily basis."

Take for example: In an October 2006 email quoted by the U.K. regulator, an employee at another bank told a Barclays trader to try to get the benchmark rate lower, saying: "If it comes in unchanged I'm a dead man."  Hours later he offered a bottle of Bollinger as thanks for the attempted manipulation: "Dude.  I owe you big time!"

The traders attempted to profit on trading bets linked to Libor and Euribor by influencing the banks' submissions that are used to calculate these benchmark rates.  Libor is set each day in London based on estimates submitted by a panel of banks.  The banks are supposed to say how much it would cost them to borrow from each other in different currencies over different time periods. "We're clean, but we're dirty-clean, rather than clean-clean," the CFTC said that the Barclays employee stated.  It added that the bankers' association representative responded: "No one's clean-clean." The CFTC said a 2008 article in the WSJournal prompted a Barclays employee responsible for submitting Libor estimates to say on an internal phone call: "I'm as guilty as hell." And then, there is the British Bankers’ Association, or "BBA" ... which is charged with computing the daily Libor rate, based on a compilation of daily interest rates from participating banks.  Sorry, we're not getting into the BBA at this time. [WSJournal, 6/28/12]