THE GUARDIAN
Barclays fined £290m as bid to manipulate interest rates is exposed
By Jill Treanor, City Editor
The boss of Barclays, Bob Diamond, is under mounting pressure after the bank was hit with fines of £290m for its "serious, widespread" role in trying to manipulate the price of crucial interest rates that affect the cost of borrowing for millions of customers around the world.
There were calls for Diamond to step down after the Financial Services Authority slapped a £59.5m fine on the bank – the largest ever levied by the City regulator - forcing him and other top executives to forgo any bonuses for 2012.
The FSA – and authorities in the US which hit Barclays with penalties of £230m – described repeated breaches of rules dating back to 2005. They involved "a significant number of employees", including senior managers, and called into question the integrity of the markets.
The FSA published embarrassing email exchanges in which Barclays staff were offered bottles of Bollinger champagne as payment for favours or their names printed in "golden letters". The emails demonstrated how traders manipulated the price of key interest rates in an attempt to make greater profits.
DAILY MAIL
Banks rigged interest rates: Barclays fined £290m after damning emails reveal how greedy traders fiddled figures to make fortunes
By Emily Allen
Devastating emails today lay bare how top banks rigged crucial interest rates to mask the scale of their bad debts.
They show how bonus-hungry traders promised each other bottles of Bollinger champagne to fix the figures that affect millions of homeowners and small firms.
Last night – as Barclays was fined a record £290million for its part in the scandal – MPs said the police should be called in to investigate the ‘appalling’ conduct.
The conspiracy involved interest rates on the wholesale money markets, where banks lend to each other.
Traders colluded to set artifically low rates to con the markets into believing the banks were in good financial shape in the run-up to the credit crunch.
Fixing the figures also allowed bankers to make money by taking out bets on the way the rates would move.
The wholesale rates affect homeowners because they influence how much they pay on variable rate loans and mortages.
Yesterday senior executives at Barclays said they would give up their bonuses for this year as a result of the record fine.
bbc.co.uk
More banks face interest rate rigging investigation
A number of banks are being investigated and could face sanctions after Barclays was fined £290m ($450m) for trying to manipulate interest rates at which banks lend to each other.
Regulators in Europe, the US and Asia have said that investigations into other banks are "ongoing". The UK's Financial Services Authority said the early signs were that Barclays had not been the only firm involved.
Tracey McDermott, director of enforcement at the FSA, which imposed fines alongside the US financial regulator, told the BBC: "We have a number of investigations that are ongoing.
"Obviously we need to look at each case on its own particular facts but the initial indications are that Barclays was not the only firm that was involved in this."
CITY A.M
DIAMOND TO FACE MPS AFTER LIBOR SCANDAL
By Peter Edwards and David Hellier
Barclays chief executive Bob Diamond is set to be hauled before parliament after the bank was fined £290m for its part in a global conspiracy to fix the rate at which banks lend to each other.
Diamond will face questions from the Treasury Select Committee after regulators in Britain and the US slapped record punishments on Barclays over its attempts to manipulate the London interbank offered rate (Libor) and its European equivalent, Euribor.
The bank must pay £59.5m to the Financial Services Authority and a further $360m (£231m) to US regulators in the first major victory for watchdogs over attempts to rig Libor, which underpins trillions of dollars of derivatives contracts worldwide and is also widely used as a reference rate for corporate lending.
Diamond said Barclays had lost sight of its “culture and values” during the affair, which occurred between 2005 and 2009, before he was promoted to chief executive.
THE SUN
Spend her victorious
Queen's Jubilee is a huge boost for the High Street
By Rhodri Phillips
Shop sales have grown at their fastest rate for 18 months as Brits splashed out on the Queen’s Diamond Jubilee celebrations.
Patriotic punters have given the High Street a much-needed boost, according to a survey by the Confederation of British Industry.
Analysts said a rise in food and drink sales for Jubilee parties and the extra Bank Holiday helped boost retail businesses.
Shoe and leather shops reported their strongest growth on record, while grocers enjoyed their best jump in sales since February 2010.
The survey follows strong sales figures from Sainsbury’s earlier in the month, which the supermarket said was partly thanks to the nation celebrating the Queen’s 60 years on the throne.
FINANCIAL TIMES
Net mortgage lending falls for first time
By Sarah O’Connor and Patrick Jenkins
Net mortgage lending by banks dropped in May for the first time on record, according to industry data, though the indication of strain in the financial and household sectors was tempered by news people continued to spend in the shops.
Data from the British Bankers’ Association on the country’s six main banks show capital repayments – which have been rising steadily for three years – overtook gross lending in May, after seasonal adjustments, for the first time since the BBA started collecting data in 1997.
Ed Stansfield, a property economist at Capital Economics, said: “While we should be wary of leaping to conclusions, the data seem to add to the evidence that activity across the economy is grinding to a halt as firms and households wait for events in the eurozone to come to a head.”
THE SCOTSMAN
Glencore’s Xstrata takeover is hanging in the balance
By Martin Flanagan
Commodities trader Glencore was last night fighting to save its cliffhanger $65 billion (£42bn) bid for mining giant Xstrata as it pushed back the timing of the deal. The move came as major Xstrata shareholder, the Qatar Investment Authority (QIA), stunned the companies with a demand for better terms on Tuesday evening after remaining silent for months as the Qataris built up the second largest stake in the miner. Richard Buxton, head of UK equities at Schroders, said: “Three cheers for the Qataris. We’ve said all along that the ratio was wrong so they’ve either now got to improve the terms or see this deal get voted down.”
Qatar Holdings has said it now wants 3.25 new Glencore shares for every Xstrata share, up from the 2.8 on the table. The bid had also been controversial because of massively lucrative “golden handcuff” arrangements for many key Xstrata executives.
FINANCIAL TIMES
Hague presses for audit on EU law
By George Parker, Political Editor
William Hague, the British foreign secretary, wants to launch a comprehensive audit of the impact of European Union law on Britain this summer, an exercise that could fuel a Conservative drive to repatriate powers from Brussels.
The huge Whitehall study comes at a time when David Cameron is trying to devise a new relationship between Britain and the rest of Europe, starting on Thursday at a European summit in Brussels.
Mr Cameron will tell European colleagues he wants to “safeguard” Britain’s position in the single market as eurozone leaders discuss much closer fiscal and political union based on the 17-member single currency area.
But many Conservatives want to go further and hope that a future Tory government will renegotiate a new membership deal with the EU – including the repatriation of powers from Brussels – and put the package to a referendum.
THE TIMES
Cameron agrees to hand an extra £1.3bn to EU bank
By Sam Coates, Sam Fleming and Charles Bremner
David Cameron will tell European leaders in Brussels today that he has agreed to inject £1.3 billion from Britain into an EU-wide growth plan.
The Prime Minister will give the go-ahead to the additional contribution to the European Investment Bank (EIB), which lends to small and medium-size businesses and projects across Europe.
Increasing the fund is the pet project of François Hollande, the French President, who believes that the additional investment will help to stimulate growth. Although it receives funds from the bank, in 2011 Britain received less than a tenth of the contracts — substantially less than France, Italy and Spain — with some 10 per cent of the money going farther afield to motorways in Russia and banks in Africa. Britain hopes to use the contribution as a bargaining chip for extra commitments to the single market.
The scale of the increase — twice the cost of this week’s fuel duty rise deferment — is likely to surprise Tory MPs and undermine Mr Cameron’s argument that he is pursuing budget restraint.
DAILY TELEGRAPH
Debt crisis: Angela Merkel dismisses Spain and Italy's pleas for aid
By Bruno Waterfield, in Brussels
Germany's Chancellor angrily rejected desperate pleading by Italy and Spain as a Franco-German rift over eurozone debt sharing threatened to unravel efforts to find a fix for the single currency at a meeting of European leaders on Thursday.
Before flying last night to Paris for emergency talks with Francois Hollande, the French President, Mrs Merkel told German MPs that instead of more cash the eurozone needed to step up debt reduction and economic reforms.
"I fear that at the summit we will talk too much about all these ideas for joint liability and too little about improved controls and structural measures," she said.
Mariano Rajoy, the Spanish Prime Minister, said he would plead with other leaders to allow euro bail-out funds or the European Central Bank to stabilise financial markets by helping to reduce borrowing costs, running at nearly 7pc for Spain.
DAILY EXPRESS
How to boost pension by 20%
By Sarah O’Grady
Pensioners could increase their income by as much as 20 per cent by following a few simple guidelines, analysts said today.
Failing to shop around for the best deals means people are missing out on retirement packages potentially worth thousands of pounds extra every year.
Those not obtaining the most generous annuities to provide retirement income are collectively sacrificing millions a year.
Comparing different companies helped pensioners gain around 21 per cent more than their original quote – equivalent to £248 extra a year on the average £25,000 pension pot, according to a survey.
And with around 500,000 annuities – the income guaranteed by retirement savings – bought each year, pensioners are missing out on about £124million annually, figures show.
THE INDEPENDENT
Lloyds set to press ahead with sell-off to Co-op
By James Moore
Lord Levene's attempt to create new force in retail banking was thwarted for a second time last night after Lloyds Banking Group said it planned to sell more than 632 branches to the Co-op in a deal worth up to £1.5bn just hours after a last ditch bid to scupper the tie up.
The City grandee and former Lloyd's of London chairman was the driving force behind the creation of NBNK which hoped to spirit away the branches – being sold as "Project Verde" – after being allowed back into the bidding when its rival appeared to be floundering amid regulatory concerns.
But last night Lloyds said Co-op was again its preferred bidder and would again be granted exclusive talks, appearing to slam the door on NBNK, which had appointed former Northern Rock boss Gary Hoffman to spearhead its bid and pledged to create a traditional "simple" bank.
