Libor scandal: 'This goes much, much higher than me,' says trader Tom Hayes at centre of probe

Tom Hayes, the trader at the centre of the Libor-rigging scandal, has warned that the conspiracy to manipulate key global borrowing rates could implicate senior bank executives.

Tom Hayes, a former UBS trader, was arrested by British police in December in connection with a UK criminal investigation into Libor manipulation, but has not been charged. Photo: EPA

 

 

In a text message to the Wall Street Journal, Tom Hayes, the former senior trader charged by the US Department of Justice in connection with interest rate-rigging said: “This goes much, much higher than me.”

Mr Hayes, a former UBS trader, was arrested by British police in December in connection with a UK criminal investigation into Libor manipulation, but has not been charged.

Jennifer Arcuri, described by the Wall Street Journal as a close friend of Mr Hayes, defended him saying he believed he was “innocent” and intended to implicate his seniors in the scandal. “He had no idea this was going to come back at him,” she told the newspaper.

She added that Libor-rigging “was a common industry practice”, saying: “It was like spanking children in the ‘70s – it wasn’t bad.”

RBS became the latest bank to be fined over its involvement in Libor-rigging paying £390m in penalties to the US and British authorities. The taxpayer-backed lender was the third major institution to be fined over Libor, following Barclays and UBS.

More than a dozen banks are being investigated as part of a global probe by regulators in countries, including the US, Britain, Canada, Japan and Switzerland. Barclays admission in June that it had attempted to manipulate borrowing rates led to the resignations of its chairman Marcus Agius, chief executive Bob Diamond, and its chief operating officer Jerry del Missier.
As well as the large fines, City analysts expect banks to face billions of pounds in potential payouts as a result of legal cases brought by customers that were financially hurt by the manipulation.
Most analysts expect this to cost the industry just over $20bn (£13bn), however some say the eventual cost will be measured in hundreds of billions of dollars and could force another round of taxpayer bailouts