Lloyds dismisses eight staff over Libor

Sep 29, 2014, 7:05 AM EDT
LLoyds Bank.
AFP Photo/Carl Court

Lloyds Banking Group has dismissed eight staff members following an investigation into the manipulation of some key interest rates set in London. The BBC reports:

The move follows the bank's £218m fine in July for "serious misconduct" over the setting of Libor. Chair Lord Blackwell said the actions of those responsible for the misconduct were "completely unacceptable".

Lloyds, which is 24.9% owned by the government, said the individuals had also forfeited £3m in unpaid bonuses. The bank said its remuneration committee would now ensure the outcome of the disciplinary process was "fully and fairly reflected" in other staff bonus payments.

Regulators found that Lloyds manipulated the London interbank offered rate (Libor) for yen and sterling and tried to rig the rate for yen, sterling and the US dollar. It was also found to have manipulated submissions for another short-term rate linked to the value of UK government debt.

Meanwhile, a landmark court victory against Lloyds Bank over unfair overdraft charges could open the floodgates for a billion-pound payout to other customers, if the courts rule later this year that the case has wider implications. The Guardian writes:

Oliver Foster-Burnell, a customer of what was formerly Lloyds TSB, took his £743 overdraft charges reclaim to court – with pro bono help from solicitors’ firm Howlett Clarke, LegalBeagles, and barrister Tom Brennan – and won.

A judge at Taunton County Court ruled that the bank was wrong to levy hefty, rising fees on Foster-Burnell’s account. He had only gone £2.67 over his overdraft limit, but the charges mounted up; soon the then 28-year-old health worker was unable to pay his bills. Lloyds was ordered to repay the charges, plus interest. Foster-Burnell was also awarded an additional £1,000 in damages, after Lloyds TSB applied a related incorrect default to his credit file.

His victory was the first known legal victory for a customer on the fairness of charges since banks won a hearing over the legality of the fees in the Supreme Court five years ago. Now the group behind Foster-Burnell’s case is going back to court in a bid to extend the ruling. Martin Lewis, founder of the Moneysavingexpert website, and one of those who led the campaign against unfair bank charges, describes Foster-Burnell as a pioneer.

“It’s important to understand, though, that as it was a county court judgment, it doesn’t set a legal precedent. But even though Oliver and his team won, they have now bravely and admirably asked to appeal this decision to help others.

Their aim is to take the case to the Court of Appeal where the outcome will set a precedent on all county courts in England and Wales,” he says. Foster-Burnell says: “It is unfair that the banking industry is allowed to profit while people suffer financial hardship. By applying these charges, and allowing them to snowball out of control, it skews the imbalance. We want the court to consider that such a system of charges can hit anyone badly – not just those in hardship – and is therefore unfair, and needs to be changed.”