Compliancex

As has widely been reported British banking behemoth Barclays Bank recently entered into a $450 million global settlement with US and UK regulators over its involvement in the Libor/Euribor rate fixing probe.

Soon after the settlement was announced the big wheels of the big bank rolled off the plank of good ship Barclays as its chairman Marcus Agius, CEO Bob Diamond, and COO Jerry del Missier all resigned in disgrace.

But this sordid story will not end there as the Libor scandal has legs and other regulatory enforcements and legal actions against other key players are sure to follow. In fact, Money/CNN is reporting that Barclays was not the only bank fiddling with these key rates because the firm was in cahoots with at least seven other banking bad boys.

“They may be just the first of many executives felled by a broader probe into interest rate manipulation by big banks,” says the magazine.

While other banks have been cited in documents that have made public as part of the settlement between Barclays and the Financial Services Authority, the British banking regulator, no specific charges have been filed against other potential perpetrators.

However, Deutsche Bank, Royal Bank of Scotland, Credit Suisse, Citigroup, and J.P. Morgan Chase all have acknowledged that they are being investigated by regulators.

Andrew Lo, a professor at MIT, reportedly said that the scandal “dwarfs by orders of magnitude any financial scams in the history of markets.”

Meanwhile outrage from Barclays’ shareholders and regulators in the US and UK has been fast and furious. In addition to the global settlement with the federal agencies Barclays will be hit with class action lawsuits. And the broader markets better prepare for more breaking news since the investigation has been going on for four years.

As market makers know, floating interest rates are set through a tricky process that relies on “word of mouth” from traders at 18 or so representative banks.

The key floating rate is the London Interbank Offered Rate (Libor) and this rate serves as a global benchmark for home mortgages, student loans and rates that cities and states pay to borrow money. Libor affects up to $800 trillion worth of financial instruments.

How far reaching this scandal will be remains to be seen, but if the Barclays’ settlement is an indicator, other banking head honchos may soon be following the British banking troika into the scandal plagued sea.

Want a daily digest of articles like this one, plus the latest compliance jobs at top-tier organizations? Join 50,000 other compliance, risk governance, and regulatory professionals and subscribe to our free afternoon newsletter.

Kyle Colona is a New York-based freelance writer and a Feature Writer for CompliancEX and the Wall Street Job Report. He has an extensive background in legal and regulatory affairs in the financial services sector and his work has appeared in a variety of print and on-line publications. You can find him on linkedin.