Barclays Libor training should have been better, boss tells court

Tue May 3, 2016 1:17pm EDT
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By Kirstin Ridley

LONDON (Reuters) - Barclays (BARC.L: Quote) should have given its traders more training on Libor and tighter rules on their communications, a senior executive at the British bank told the trial of five former bankers charged with manipulating the benchmark.

Harry Harrison, the co-head of Barclays' non-core division, told the London court on Tuesday that he had learnt during on-the-job training about the importance of setting Libor benchmark interest rates independently from a bank's commercial interests.

Harrison said he expected his colleagues to have been equally aware of this distinction, although Barclays should have provided more formal training on the issue and been clearer about what was acceptable in their conversations.

Jay Merchant, Alex Pabon, Jonathan Mathew, Stylianos Contogoulas and ‎Ryan Reich have each pleaded not guilty to one charge of conspiracy to defraud by manipulating Libor between 2005 and 2007, in the third trial of individuals accused of rigging the ‎London interbank offered rate, a benchmark for trillions of dollars of financial contracts and household loans.

Harrison, a witness for the prosecution, said he had been unaware that New York traders had asked London colleagues to submit rates that would benefit their trading positions, the central allegation made by Britain's Serious Fraud Office.

He did, however, say there was a "gray area" when traders could have told Libor submitters of their trading positions but did not necessarily ask them to submit rates to reflect them.

"I don't recall, but it is possible," Harrison said.

"We should have been more prescriptive about the conversations. I wasn't aware of any requests for specific rates," he told the court.   Continued...

The Barclays logo is seen on public hire bicycles in central London October 30, 2014. REUTERS/Toby Melville