A Financial Services Authority (FSA) audit report into the London Interbank Offered Rate (LIBOR) scandal has found the regulator failed in at least three key areas which meant it did not realise the rate was being fixed.
The report, which was commissioned by FSA chairman Adair Turner, looked at whether the regulator was implicated in the scandal which broke last June. Banks, such as Barclays and Royal Bank of Scotland, falsely inflated or deflated their average interest rates so as to profit from trades or give the impression that they were more creditworthy than they were. Today's report found the FSA's conduct to be sub-par in three areas. It said the FSA's focus on dealing with the financial crisis, together with the fact that contributing to and administering LIBOR were not ‘regulated activitie...
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