The UK’s Financial Conduct Authority (FCA) issued its first warning notices on Monday to two bankers who allegedly manipulated benchmark interest rates.
The FCA didn’t release the names of the bankers or their employers.
One notice went to a submitter of benchmark interest rates at a bank who used his role to benefit the positions of traders.
The other notice went to a bank manager for failing to oversee and supervise the bank’s benchmark submissions process.
The notice said the manager was “aware of the absence of systems, controls or policies governing the procedure for making interest rate benchmark submissions at the bank, and took no steps to address this.”
The manager knew about conflicts of interest in his department, the notice said, because submitters of the benchmark also acted as derivative traders.
This was the first time the FCA published warnings since given the power to do so. In the past, the FCA’s predecessor agency, the Financial Services Authority, only made its enforcement proceedings public once an individual or company was punished.
A number of banks have been fined by U.S., European, and British regulators for manipulating the LIBOR benchmark, which is used to establish short-term interest rates on products ranging from derivatives to home loans.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.