Barclays has agreed to pay hundreds of millions of dollars to resolve accusations that it attempted to manipulate a crucial interest rate, the first settlement in a sprawling global investigation targeting many of the world's biggest banks, the New York Times' DealBook blog reported today. The British bank struck a deal with regulators in Washington, D.C., and London, and the full terms of the deal will be announced later today. The U.S. Commodity Futures Trading Commission is expected to levy a $200 million penalty, the largest in the agency's history. The Financial Services Authority in London is also involved in the action. The investigation centers on the way Barclays and other big banks set a key benchmark for borrowing known as the London Interbank Offered Rate (LIBOR). Regulators have questioned whether the banks attempted to improperly set the rate at a level that was favorable to their own institutions.
