8 Worst Corporate Scandals in Europe

2. Libor Rigging Scandal

Barclays and Royal Bank of Scotland were fined $6 billion for rigging the Libor interest rates (London Interbank Offered Rate), together with UBS, JP Morgan, Citigroup, and Bank of America. Deutsche Bank, RBS, and Société Générale were also affected by the scandal and have paid additional $4,5 billion – most of which came from DB (they really have some issues, don’t they). This is, arguably the biggest banking scandal that has shaken the world thus far because it cost the global economy at least $10 billion. But, how did banks manipulate the Libor? To put it simply, they have manipulated the interest rates of their own accord (often in communication with each other) instead of posting the actual rates. This gave the banks a healthy profit at the expense of traders. This went on from 2003 to 2012, and apart from aforementioned fines – all affected banks had to sack an insignificant number of their personnel responsible for Libor rigging. The question remains whether these fines are enough? After all, they only amount to a certain percentage of banks’ earnings. It seems that apart from being utterly non-ethical, this business model is certainly profitable.

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