COPENHAGEN: Barclays Plc is pulling out of the rate-setting panel for interbank lending in Denmark, marking the second panel the British bank has quit after being rocked by an interest rate rigging scandal.
Barclays will stop setting the Copenhagen interbank offered rate (CIBOR), the Danish Bankers Association said on Thursday.
"We recognise that Barclays has decided to stop as contributor and we will hereafter continue with seven contributors," the DBA said.
Barclays was last month fined $453 million by US and UK regulators for rigging interest rates, which prompted its chairman and chief executive to quit and plunged the bank into crisis and shook up the industry.
More than a dozen other banks are involved in a global probe into possible manipulation, and reputational risks from the Libor scandal have made it less attractive to belong to more obscure interbank lending rate panels.
Dozens of interbank rates are set in financial centres across the world for a range of currencies, and are used as benchmarks to help set prices for home loans, credit cards and derivatives products.
Barclays is reviewing its participation in many interest rate panels, sources have told Reuters. It could leave more illiquid currencies, where it is not one of the most active contributors.
It is pulling out of the rate-setting panel for interbank lending in the United Arab Emirates. It will leave CIBOR with effect from Aug 27, the DBA said.
Barclays declined to comment.
The DBA and the Danish minister for business and growth have launched an inquiry into the setting of the Danish CIBOR rate.
Jorgen Horwitz, head of the DBA, said he believed the rate was accurate, but added: "It is absolutely decisive for the bankers association that there is also confidence from market participants and customers in our reference rates."
Other banks are pulling out of panels that set interest rates in places like Singapore and Hong Kong. Royal Bank of Scotland has quit a panel in Singapore following an internal review, and has exited similar panels in Tokyo and Hong Kong.
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