MOST bankers believe Libor manipulation was widespread in the industry, with weak regulation and short-term pay incentives being blamed for encouraging the bad practice, according to a survey published yesterday by research and consulting firm Lepus.
Over half called Libor-rigging “pervasive” in banking, with risk management and back office staff most likely to see the practice as widespread.
However a majority of workers in the industry also believe Libor was rigged in an effort to preserve confidence in financial markets during a time of crisis, and 60 per cent of think regulators allowed manipulation for the same reason.
“Not only had manipulation of rates become generally accepted among banks, but it was even tolerated by regulators to some degree,” the report concluded.
“It is abundantly clear that the methodology for setting these rates needs to be revised and regulated more closely.”