Barclays to quit UAE rate panel

17/07/2012 07:48 AST

British bank Barclays plans to pull out of the rate-setting panel for interbank lending in the United Arab Emirates because of its involvement in the Libor scandal in Britain, industry sources told Reuters yesterday.

Barclays belongs to a panel of 12 banks that quote indicative interbank lending rates in UAE dirhams. The quotes are averaged to arrive at a daily range of Emirates Interbank Offered Rates (Eibor), which are used to price financial instruments in the Gulf’s top financial center.

“Barclays has indicated to the UAE central bank that it wants to quit the panel, and the central bank has called for a meeting on Tuesday to discuss who will replace Barclays,” a source familiar with the matter told Reuters.

A spokesman for Barclays said the bank had no immediate comment. UAE central bank treasury officials declined to comment.

Barclays recently agreed with US and British regulators to pay $ 453 million in fines for attempting to manipulate the London Interbank Offered Rate through its submissions to the Libor panel. There has been no suggestion that it tried to manipulate Eibor.

Barclays has a wide range of operations including corporate and personal banking in the UAE. A new report said yesterday that senior managers at Barclays had warned staff in an internal memo that the Libor scandal will envelop other banks.

The memo circulated on Friday said that revelations about its rivals would “put in perspective” Barclays’ culpability.

Meanwhile Barclays’ former chief operating officer Jerry del Missier will answer MPs’ questions today.

Del Missier stands accused of having mistakenly believed Barclays was told by the Bank of England in 2008 to under-report its borrowing cost.

Arab News