telegraph.co.uk / By Harry Wilson / March 5, 2013
In an internal report on its handling of the scandal, the Financial Services Authority admitted that several warnings about the rigging of borrowing rates had gone unheeded.
The FSA conceded it had been slow to respond to intelligence provided by banks and its own staff about the dangers posed to the financial system by Libor-rigging.
In one email an employee in the FSA’s legal division sent an email to a colleague in its risk department, discussing the risk to loans if rates were being rigged.
“There could be a more significant issue if it [Libor] is not being calculated properly as that would potentially mean that people are paying rates on a false premise,” wrote the unidentified official in April 2008.
In another warning the same month, the compliance officer of a smaller bank sent an email to the FSA stating: “It appears to us that something is wrong when a panel of contributor banks is supplying Libor at a below what the banks can achieve in the market. It may be worth the FSA investigating to see if the contributor banks are making profits on the back of these quotes.”
