LONDON: Regulators
are investigating Credit Agricole, HSBC, Deutsche Bank and Societe
Generale over the Libor manipulation scandal that claimed the boss of
British bank Barclays, the Financial Times reported Thursday.
Citing
sources close to the probes, the FT said regulators were examining
evidence of links between traders at all four banks and Barclays' former
trader Philippe Moryoussef.
US futures regulator, the Commodity
Futures Trading Commission, recently accused an unnamed trader of having
"orchestrated an effort to align trading strategies among traders at
multiple banks".
According to the business publication, this trader was former euro-swaps trader Moryoussef.
Britain's
financial regulator, the Financial Services Authority (FSA), is
investigating seven institutions over the scandal, a senior official
told lawmakers on Monday.
Tracey McDermott said the probe involved "not only British banks".
Barclays
was fined £290 million ($452 million, 360 million euros) after
admitting attempting to manipulate the Libor and Euribor rates between
2005 and 2009.
Libor (London Interbank Offered Rate) is a
flagship London instrument used as an interest benchmark throughout the
world, while Euribor is the eurozone equivalent.
The rates play a key role in global markets, affecting what banks, businesses and individuals pay to borrow money.
WASHINGTON - The
health of 15 of the world's largest financial institutions was called
into serious question Thursday, as Moody's downgraded their credit
ratings, citing exposure risk and to Europe's economic woes.
Some
of the biggest names in banking, including Goldman Sachs, Barclays,
Citigroup, HSBC and Deutsche Bank, saw their ratings slashed, spelling
increased scrutiny from markets and potentially higher borrowing costs.
Moody's
said, in essence, that the banks' actions inherently risked massive
losses and that they were exposed to the roiling financial crisis and to
each other.
"All of the banks affected by today's actions have
significant exposure to the volatility and risk of outsized losses
inherent to capital markets activities," said Greg Bauer, Moody's global
banking managing.
In total four firms were downgraded by one notch, 10 firms by two notches and one by three notches.
Holding companies of a number of the same banks were also downgraded.
Credit Suisse faced the largest downgrade, with its rating slashed three levels from Aa1 to A1.
Under-pressure US banking giant Morgan Stanley was seen as winning a partial victory by only receiving a two-notch downgrade.
The bank welcomed the partial reprieve, but nevertheless questioned the Moody's decision.
"While
Moody's revised ratings are better than its initial guidance of up to
three notches, we believe the ratings still do not fully reflect the key
strategic actions we have taken in recent years," Morgan Stanley said
in a statement.
Citigroup was similarly unimpressed with the Moody's verdict.
"Citi
strongly disagrees with Moody's analysis of the banking industry and
firmly believes its downgrade of Citi is arbitrary and completely
unwarranted."
It added that "sophisticated" investors no longer depend so heavily on ratings agencies to make assess credit risk.
The
Moody's swathe of downgrades amounts to a fresh indictment of the
health of the top tier of the global financial system, which has seen
wave after wave of crisis since 2008.
Since the sub-prime crisis, banks have seen the value of their assets slump and their access to capital shrink.
That has repeatedly forced taxpayers and central banks to step in to provide liquidity.
Many governments have been forced to prove bailouts straining already precarious public finances.
On Thursday, Spain became the latest to signal a bank bailout.
Madrid
announced that its crisis-torn banks need up to 62 billion euros (US$78
billion) to survive. It is expected to formally ask its eurozone
partners for the cash on Friday.
The 15 banks downgraded were:
Bank of America, Barclays, Citigroup, Credit Suisse, Goldman Sachs,
HSBC, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland, BNP
Paribas, Credit Agricole, Deutsche Bank, Royal Bank of Canada, Societe
Generale and UBS.
Moody's began their review of the banks in
February, and the move was widely anticipated, helping to send the Dow
Jones Industrial Average sharply lower on Thursday.
In a separate announcement, Moody's also downgraded British bank Lloyds TSB.
