Lloyds bank dismisses eight employees over Libor and claws back bonuses

Lloyds Banking Group plc says it has dismissed eight employees following a probe into Libor manipulation, and has clawed back £3 million in bonuses.

The investigation followed a £218 million fine Lloyds Bank had to pay in July 2014, for the “serious misconduct”. Regulators had found that Lloyds Bank manipulated Libor for yen and sterling and tried to fix the rate for the US dollar, sterling and yen.

Libor (London Interbank Offered Rate) is a benchmark rate that some of the world’s major banks charge each other for short-term loans. Hundreds of trillions of dollars in loans and securities are linked to Libor. It serves as the first step to calculating interest rates on loans across the world. When Libor is manipulated it distorts trust in the marketplace, and can destabilize the global financial system.

The London-based bank was also alleged to have manipulated submissions for another short-term debt pegged to the value of British government debt.

Lloyds Chairman, Lord Blackwell, said the action of the eight staff who were dismissed were “completely unacceptable.”

Lloyds Banking Group Plc. which is 24.9% owned by the British taxpayer, assured that its remuneration committee would now make sure the outcome of the disciplinary process was “fully and fairly reflected” in the bonus payments of other employees.

The company said there was nothing it could do about several individuals who had left Lloyds before the settlements.

Antonio Horta-Osorio, CEO of Lloyds Banking Group plc., said:

“We are determined to make Lloyds Banking Group a company of the highest integrity and standards.”

Mark Carney, Governor of the Bank of England, had said in July that the Lloyds staff attempts at manipulating Libor were “highly reprehensible.”

Lloyds says it has given the findings of its investigation to the Financial Conduct Authority, the UK’s financial regulator.