Evidence is being produced that, as expected, the entire LIBOR/Euribor scheme is an organized-crime operation. The Financial Times reports today that U.S. and U.K. regulators — the U.S. Commodities Futures Trading Commission (CFTC) and Britain's Financial Services Authority (FSA) are focusing on at least four of Europe's biggest banks in the investigation on the LIBOR/Euribor manipulation, "suspecting that Barclays traders were the ringleaders of a circle that included Crédit Agricole, HSBC, Deutsche Bank and Société Générale."
The CFTC says that an unnamed trader "orchestrated an effort to align trading strategies among traders at multiple banks ... in order to profit from their futures trading positions." According to FT intelligence, that trader was Philippe Moryoussef, euroswaps trader at Barclays from 2005 to 2007. "His strategy was based on the fixing of three-month swaps pegged to Euribor." His contacts were Michael Zrihen at Crédit Agricole, Didier Sander at HSBC, and Christian Bittar at Deutsche Bank, all of whom no longer work at the banks in question. The identity of the traders at SocGen remains unclear and the probe appears to be at an earlier stage.
The FSA has found out that there were at least 20 requests from traders at different banks to Barclays' Euribor submitters between 2006 and 2008. In the same context, the FT reports that Bank of England Governor Mervyn King has "sent a letter to central bankers inviting them to a Sept. 9 meeting in Switzerland to discuss 'radical reforms' to the LIBOR process, according to a person familiar with the contents."