Manipulation of the LIBOR rate believed to be pervasive across the banking industry
Lepus has published the results of an online survey of banking industry professionals that examines their opinions on the LIBOR rate manipulation scandal. The survey gathers insight from 103 respondents from 44 banks across the globe, and yields some very interesting results. The full report is attached.
Over half of respondents to the survey believed that manipulation of the LIBOR rate has been widely practiced across the banking industry, although with the qualification that the intention behind this practice was to preserve confidence in financial markets during a time of crisis. A significantly higher proportion of Back Office and Middle Office personnel believe that this practice has been widespread.
While a large proportion of respondents believe that weak regulation of the LIBOR rate setting process is to blame for this practice, this sentiment is not as widely shared by Middle Office and Back Office personnel. Interestingly, all respondents from the Asia-Pacific region believe that compensation practices skewed towards short-term results lie at the heart of the issue.