View: Barclays to settle U.K., U.S. Libor probes: report - The Globe and Mail

Barclays PLC may announce a deal with British and U.S. regulators as early as Wednesday to settle a probe into allegations staff manipulated a key interbank lending rate known as Libor, the Financial Times reported.

The settlement would cover Britain’s Financial Services Authority and the U.S. Commodity Futures Trading Commission, two among several regulators which have been conducting probes, the newspaper said.

The CFTC was scheduled to hold a news teleconference at 12.30 p.m on an unspecified matter. The call is with the director of enforcement, a person familiar with the matter said.

Regulators have been investigating allegations that several banks, including Barclays, sought to manipulate the London interbank lending rate which underpins trillions of dollars of derivatives contracts worldwide and is also widely used as a reference rate for corporate lending.

Barclays was not available to comment. The FSA would not comment.

“The CFTC will want to lead the way on this and be seen to have brought yet another institution to heel,” one London-based industry consultant said. “I would expect it to be released when DC opens up for business this morning.”

Barclays said in March it was engaged in a possible resolution with regulators looking into potential enforcement proceedings.

As well as the FSA and CFTC, other authorities probing Libor include the European Commission, Japan’s Financial Services Authority, and the U.S. Department of Justice.

Other banks involved include Citigroup Inc. , HSBC Holdings PLC , Royal Bank of Scotland and UBS AG .

Several banks have suspended traders but there have been no criminal charges.

Two bankers at British lender Lloyds Banking Group who had been suspended as a result of the Libor probe returned to work this week, a person familiar with the matter said.

Libor is the benchmark for around $360-trillion (U.S.) worth of financial contracts worldwide. A daily poll asks banks at what rate they think they will be able to borrow money from each other in 10 major currencies and for 15 borrowing periods ranging from overnight loans out to 12 months.

As the credit crisis took hold, allegations started mounting that Libor no longer reflected reality and authorities undertook to examine whether traders tried to influence whether the rate went up or down to profit on bets on the direction it would go.