It’s easy to pick on government regulators for not ‘getting it’ when it comes to finance, but I’m pleased to read the UK’s FSA report on Barclays’ actions and punishment related to LIBOR rigging. The FSA gets it.
The traders, on the other hand, do not get it, which is hard to fathom. Everybody I ever worked with on the trading floor knew different types of communication lend themselves to certain media.
A few select passages from the FSA report on electronic messages by Barclays traders:
“If you breathe a word of this I’m not telling you anything else”
“If you know how to keep a secret I’ll bring you in on it”
“We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help.”
Did nobody teach these guys? Manipulation of this sort never gets written down. Insidery gossip over the phone must be spoken in code. If the information is particularly juicy, make the call on a personal cell, as all firm phone lines are taped. This was very sloppy work by the Barclays guys.
 3month LIBOR
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