WASHINGTON (MNI) – The following are the latest developments in the
LIBOR scandal, as of Friday:

– The Bank of England Friday released more documents related to the
2008 cooperation with the New York Federal Reserve Bank to influence the
British Bankers Association to reform its rate setting procedures —
this time with a twist. The documents, the BoE said, show “The Geithner
memorandum contains no allegation of wrongful behavior,” and relates
only to concerns about the operation of the LIBOR process in times of
market stress and that any system of self-reporting has the risk of
accidental or deliberate misrepatorting.

– The BoE also said that with the exception of one memo it received
from (then N.Y. Fed chief) Geithner, “none of the other document
published on 13 June 2012 by the FRBNY has been shared with the Bank.”

– The latest set of emails released by the Bank of England, many
labeled “confidential,” disclosed internal disagreements among top
officials including Deputy Gov. Paul Tucker in June of 2008 on possible
ways to influence an improvement in the LIBOR process which the Bank did
not have responsibility to regulate. One, from the head of the foreign
exchange division of the Bank, observed that LIBOR aberrations might
simply be “a function of the current (admittedly prolonged) state of
market dislocation. So it might go away with time.” According to CFTC
allegations, deliberate LIBOR distortions by Barclays continued for
another year. [See MNI story published 8:27 ET]

– CNBC reported Friday that a group of banks being investigated in
the interest-rate rigging scandal are looking to pursue a group
settlement with regulators in preliminary discussions.

– Federal Reserve Chairman Ben Bernanke, in his second day of
testimony on Capitol Hill Wednesday, at one point responded that there
were main allegations made by the CFTC in reaching its settlement with
Barclays, that first there was a high-level directive to optimize LIBOR
submissions and second, that some Barclays traders conspired with their
counterparts at other firms to manipulate LIBOR for their own advantage.
No one at the Fed, Bernanke said, knew about the second allegation in
2007 or 2008.

– Regarding the second allegation, a scheme to which Barclays
admitted and which lasted about three years, The New York Times said
“people with knowledge of the matter” said the other parties to the
conspiracy were traders for Credit Agricole, HSBC, Deutsche Bank and
Society Generale.

** MNI Washington Bureau: 202-371-2121 **

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