America's Commodity Futures Trading Commission (CFTC) has published some of the staggering deals made by Royal Bank of Scotland's Libor setters, which led to a £390 million fine for the bank.
The CFTC said: 'RBS created an environment for a number of years that eased the path to manipulation by placing derivatives traders and submitters together on the same desk, heightening the conflict of interest between the profit motives of the traders and the responsibility of submitters to make honest submissions.'
To highlight this the CFTC published a series of messages sent via email and other instant messaging tools. Here is an example of some of the worst instances and admissions of Libor lowballing:
August 20, 2007:
Yen Trader 1: Where’s young [Yen Trader ] thinking of setting it?
Yen Trader 2: Where would you like it? Libor that is.
Yen Trader 1: Haha, glad you clarified! Mixed feelings but mostly I’d like it all lower so the world starts to make a little more sense.
August 20, 2007:
Senior Yen Trader: This Libor setting is getting nuts.
Senior Yen Trader 1: It's just amazing how libor fixing can make you that much money.
Senior Yen Trader 2: It's a cartel now in London. They smack all the one year IRS and fix it very high or low.
December 5, 2007:
Yen Manager: Pure manipulation going on.
April 2, 2008:
Senior Yen Trader: Nice Libor. Our six-month fixing move the entire fixing. Hahahah.
The CFTC also published some of the key messages that showed traders finally twigging that Libor fixing may have been picked up on by the authorities:
Yen Trader 1: The BBA called to ask me about that today.
Senior Yen Trader: Really?
Yen Trader 1: Yes.
Senior Yen Trader: They complain?
Yen Trader 1: Asked to speak to me about the low 6m rate...not just to make sure I was happy with it.
But despite this warning sound, traders at the bank continued to manipulate Libor and even used sushi as a bartering tool:
December 4, 2008:
Swiss Franc Trader: Can [you] put 6m swiss Libor in low please?
Primary Submitter: No.
Swiss Franc Trader: Should have pushed the door harder.
Primary Submitter: What's it worth?
Swiss Franc Trader: I've got some sushi rolls from yesterday?
Primary Submitter: Ok low 6m , just for you.
Swiss Franc Trader: Wooooooohooooooo.
September 15, 2009:
Yen Trader 1: Can we lower our fixings today please?
Primary Submitter: Make your mind up. Haha , yes no probs.
Yen Trader 1: I'm like a whore's drawers.
Click here to read the full transcript published by the CFTC.