Here are some initial thoughts from Tim Strong at Taylor Wessing on the FSA Final Notice in the Barclays LIBOR matter.
“Having read the final notice, it’s not clear that what Barclays did ever directly resulted in a LIBOR figure it shouldn’t have.
The Barclays submissions departed from the BBA rules for LIBOR setting, and there was undoubtedly an effort to submit figures which would result in a more favourable outcome for them or traders at other banks.
Some of the contemporaneous mails suggest the submissions did influence the outcome, but it isn’t clear that they did or how.
One of the reasons for that is that sending artificially low or high rates won’t necessarily affect the outcome unless a number of others do the same, because the BBA rules discount the highest and lowest figures (I think the four highest and four lowest) before averaging the rest.
Outliers get screened out.”
Thank you to Tim for letting me share this (@strong_tim on Twitter)