The Financial Conduct Authority (FCA) has fined Lloyds Bank and the Bank of Scotland, both part of Lloyds Banking Group, £105m for serious misconduct relating to the Special Liquidity Scheme (SLS), the British Bankers’ Association (BBA) Repo Rate and the London Interbank Offered Rate (LIBOR).
Lloyds said in a statement it had reached settlements totaling £218m with UK and US authorities for “legacy issues regarding the manipulation several years ago” of its submissions to LIBOR and the Repo Rate.
The BBA Repo Rate was used by the Bank to calculate the fees for the SLS.
A total of £70m of the FCA fine relates to attempts to manipulate the fees payable to the BoE for the firms’ participation in the SLS scheme, which was introduced in April 2008 to improve banks’ liquidity.
Between April 2008 and September 2009, four individuals acted to reduce the fees, regulators determined, and Lloyds has agreed to pay £8m in compensation to the BoE “for amounts underpaid”.
On LIBOR, the group has reached settlements with the FCA, the United States Commodity Futures Trading Commission (CFTC) and the United States Department of Justice (DoJ).
The settlements followed investigations into submissions between May 2006 and 2009, and related systems and controls failings.
Under the settlement, Lloyds group has agreed to pay £35m, £62m and £51m to the FCA, CFTC and DoJ respectively.
The UK regulator’s £105m total fine is the joint third highest it or its predeccesor the Financial Services Authority has ever imposed.
Lloyds said in a statement: “The group condemns the actions of the individuals responsible for the conduct in question, which it regards as totally unacceptable and unrepresentative of the cultural changes that the group has implemented. The actions will be deplored by all employees.
“The manipulation of submissions covered by the settlements took place between May 2006 and 2009 and the individuals involved have either left the group, been suspended or are subject to disciplinary proceedings. The board will now consider all the remuneration implications and potential actions available to it.”
