A former Barclays (BARC.L) trader on trial in London on charges he conspired to rig Euribor interest rates said on Thursday he was no more senior at the bank than people who served burgers at fast-food chain McDonald’s.
Prosecutor James Waddington told the jury at Southwark Crown Court that Italian-born Carlo Palombo was earning “just shy” of 1.5 million pounds by 2008 and had been promoted to vice president by 2009.
But Palombo, the first of five traders charged in the high-profile case to give evidence and face cross-examination, said his promotions had been “very standard” in the industry.
“VP means junior,” he said, comparing the title to being “like the guy who serves you at McDonald’s”.
Four former Barclays bankers and one Deutsche Bank (DBKGn.DE) employee each face one charge of conspiracy to defraud by dishonestly manipulating Brussels-based Euribor rates between 2005 and 2009.
Philippe Moryoussef, a former senior trader who is being tried in absentia, Palombo, Briton Colin Bermingham, Sisse Bohart, a Dane, and Frankfurt-based Deutsche employee Achim Kraemer deny the charge.
The group, aged between 39 and 61, is the first to be charged over alleged Euribor misconduct in a global investigation into benchmark rate rigging, which British investigators first started examining in 2012.
Euribor, the euro interbank offered rate, and Libor, the London interbank offered rate, determine the rates on around $450 trillion of financial contracts and loans worldwide.
Rates such as Euribor are submitted by major banks each day and were designed to reflect their estimated cost of borrowing in different currencies over various time frames.
Palombo conceded that he had earned a lot of money in banking, but said he had not been seeking wealth when he became a banker, had taken the job only so he could leave Italy and work in London and that he had never relished being “surrounded by bankers”.
“If you want to have a conversation about income inequality, let’s have a conversation about it,” he said.
When asked why he had sent requests to submitters for rates that were profitable for his team, he said he had usually been told to do so by superiors, that these requests represented a fraction of his job and “not for a second” did he think they were wrong.
If rate submitters had a choice between “equally valid rates”, it was normal practice at the time for the bank to choose a rate that would benefit its business, he said. “Our job was to try to do what was good for the bank, not what was bad for the bank.”
Waddington showed the court messages in which Palombo had been asked by his superior, senior trader Moryoussef, to send requests for higher rates to colleagues at Barclays as well as traders at Deutsche Bank and French bank Societe Generale.
He alleged that Palombo knew perfectly well at the time that this constituted an “outrageous and flagrant breach” of the rules. Palombo denied this.