On June 27, 2012, Barclays agreed to pay $455 million to U.S. and U.K. regulators to settle an allegation that they were involved in an interest rate fixing that affects financial system worldwide. Regulators after a two year investigation found that the Barclays “systematically” attempted to rig the London interbank offered rate (Libor). Investigations were involved with suspected interest rate manipulations during the 2008 market turmoil.

Introduced in October 1984, Libor is an average interest rate that leading banks charge to each other for borrowing money. Therefore, it is the benchmark interest rate around the world. Many financial institutions, credit card companies, mortgage institutions, and others set the interest rate they charge to their customers and their financial products based on Libor. Worldwide, over $350 trillion worth of financial products are tied to the Libor.

Major banks including Citigroup, Deutsche Bank, HSBC Holdings, JPMorgan Chase, and Royal Bank of Scotland Group have been investigated by the regulators of the U.S. and the U.K. Many bank officers suspected to be involved in the scandal including the Barclays CEO Robert Diamond and COO Jerry del Missier has been fired or forced out of the job. Many more will become the victims of the scandal in the near future.