Emails between staff about fixing Libor were “improper”, says former Barclays senior executive
A former senior executive at Barclays has today called emails between staff at the bank about setting Libor to better suit their trading position "improper".
Eric Bommensath was formerly global head of fixed income at the bank and today gave evidence in a trial against five former Barclays employees accused of offences relating to manipulating US-dollar linked Libor.
Former traders Stylianos Contogoulas, Jay Merchant, Alex Pabon and Ryan Reich, along with one of Barclays' former Libor submitters Jonathan Mathew, have been charged with conspiracy to defraud for alleged actions between June 2005 and September 2007.
Earlier on in the trial, Bloomberg reported that the prosecution produced an interview between Merchant and the Serious Fraud Office (SFO), where the former trader alleged that Bommensath and two other executives must have been aware of the alleged fixing activities.
According to the SFO interview, Bommensath is alleged to have told Merchant over lunch "to introduce the New York swaps desk to these new practices" and to "teach them how to communicate with the cash desk in London and make the New York desk more profitable".
However, when asked by the prosecution today whether he had been aware of emails between staff that talked of fixing Libor to meet their needs, Bommensath said "absolutely not" and, when asked what he thought of the requests in the emails, he said "I would say they're improper".
The former Barclays senior executive also commented on the importance of having Libor honestly set, noting that, if this was not the case, "you don't need to be a senior banker to understand that some people will lose money more than they should".
Bommensath also said that his socialising with Merchant had only extended to a game of tennis.
However, while cross-examining Bommensath, Merchant's lawyer pointed out that the former senior executive was far removed from the day-to-day role of traders and, that by the time the period of the charges began, Bommensath himself had not traded in swaps for roughly 11 years.
The trial, which started earlier this month, is currently being heard in Southwark Crown Court and is the third brought the SFO in relation to its ongoing investigation into alleged Libor manipulation.