Lloyds Banking Group has been accused of “highly reprehensible” behaviour by the Bank of England, after being found to have rigged interest rates to cut the fees it owed to a taxpayer-funded rescue scheme during the financial crisis.
The state-backed bank was ordered to pay £226m as part of a settlement with US and UK authorities. That sum included £218m of fines for manipulating key benchmark interest rates and a £7.8m compensation payment to the BoE for artificially reducing fees it paid for the central bank’s lending lifeline.
Lloyds is the seventh institution to settle as part of the global probe of manipulation of Libor and other interbank lending rates. But it is the first to pay penalties for manipulating “Repo” rates, used to set fees for the BoE’s Special Liquidity Scheme, which offered banks access to cheaper funding.