Sir David Davis signs letter on the LIBOR scandal

As published in the Times Letters to the Editor

Sir, We read with concern the excerpts of Andy Verity’s book on the Libor/Euribor interest rate “rigging” scandal serialised in The Times (May 22-24). In the UK nine junior and mid-level traders were given lengthy prison sentences for seeking to commercially influence the Libor/Euribor benchmarks. Their conduct, however, was normal market practice.

The US courts have ruled that there was nothing fraudulent in identical conduct by US and UK traders prosecuted there. This leaves the UK alone in treating the actions of the traders as criminal. Moreover, the traders’ conduct was dwarfed in seriousness by the practice of “lowballing” Libor — the term for the practice of manipulating the rate at which banks could borrow from each to make it look artificially low during the financial crisis.

Mr Verity’s book alleges that submissions far below the accurate borrowing rate were published under pressure from banks’ boards of directors, the Bank of England and the British government. That conduct has never been prosecuted. Crucial evidence was withheld from the Treasury committee’s 2012 inquiry into Libor. Parliament’s efforts to get to the truth were thwarted. The scandal merits re-examination by the courts and parliament.