The Commodity Futures Trading Commission, the U.S. Department of Justice, and U.K.’s Financial Conduct Authority are ordering Lloyds Banking Group PLC (LLOY) to pay $370 million in fines for trying to rig benchmark interest rates, including the rate that influenced how much the bank paid to be able to get emergency taxpayer funding during the financial crisis.
The regulators content that Lloyds attempted to manipulate the rates to enhance its financial position. Its HBOS unit is accused of attempting to lowball Libor submissions to make it seem as if it was in solid financial health when Lloyds was acquiring it.
Lloyds also purportedly tried to rig the U.S. dollar Libor rate, conspired with Rabobank NV to affect the Japanese yen Libor rate, and manipulated the BBA Repo Rate. The benchmark, which is now defunct, played a part in assessing fees that banks paid to the Bank of England to get U.K. government bonds in exchange for illiquid mortgage-backed securities. Lloyds says it repaid $13.6 million to the bank for what it didn’t pay to the “Special Liquidity Scheme,” which is the name of the taxpayer-backed facility.