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On July 4, members of UK Parliament grilled an American banking executive who had to resign this week. CNBC's Kelly Evans offers an update on Barclays' rate fixing scandal.
Moody's and Standard & Poor's both lowered their outlooks on Barclays to "negative" from "stable" in the wake of the interest rate manipulation scandal. CNBC's Kelly Evans reports.
Futures turned negative again in choppy pre-market trading Thursday as grim comments from ECB President Mario Draghi weighed on sentiment and even trumped a pair of better-than-expected employment reports.
Take a look at some of Thursday’s morning movers:
CNBC's Kelly Evans reports on all the market moving events from Europe, including UK lawmakers voting on the next step for the Libor rate-fixing probe, and an expected rate cut by the ECB.
"A judicial inquiry is used when we want to know what has happened, in this case we already know what has happened, we have had a full finding by the FSA, this is not about what happened this is what are politicians going to do about it?" John Thurso, member of the treasury select committee, House of Commons, told CNBC.
"From a trading perspective I would buy banking stops right now, but it is challenging of course the purging of the banking sector in Europe in particular has not ended yet, not even near," Beat Wittmann, CEO and Partner of Dynapartners, told CNBC.
Robert E. Diamond Jr., the former chief executive of Barclays, told a British parliamentary committee on Wednesday that the manipulation of global interest rate benchmarks involving 14 traders at the bank had made him “physically sick.” The NYT reports.
Hans Goetti, Chief Investment Officer Asia, Finaport discusses the implications the controversy will have on the market and on the banking sector. He adds that changes will most probably have to be made to Libor.
Michael Lewitt, Vice President & Portfolio Manager at Cumberland Advisors, in an interview alongside guest host Andrew Pease of Russell Investments, says Barclays CEO Bob Diamond's U.K. testimony left many questions unanswered.
"What's clear in the documents that Barclays produced yesterday is that they have raised very serious questions about the complicity and collusion among the UK establishment in trying to lower LIBOR during the financial crisis period." Simon Nixon, European Editor of Heard on the Street at The Wall Street Journal told CNBC. "I've no idea whether Bob [Diamond] will try and throw a nuclear bomb under London today or not but what's clear is those documents raise very serious questions," he added.
"Given the flurry of news stories I think that first questions will address Bob Diamond and the assertions he has made implicitly regarding contact with the Bank of England " Lord John McFall, former chairman of the Treasury Select Committee, told CNBC.
"What is going to be interesting from Bob Diamond this morning is that they were raising concerns that there were problems with the whole Libor rate setting system back in 2005, 6,7, it is a far from perfect system this guide price," Chris Tinker, founder at Libra Investment Services, told CNBC.
"Around about the time of the financial crisis a lot of the Libor rates were quite elevated and it was used by the MPC as an indicator of the stress in the financial system when banks were finding it harder to access capital the spread went higher," Andrew Sentance, former monetary policy committee member at the BoE, told CNBC.
"We started last year an investigation from the antitrust point of view, we had signals that some banks were developing illegal agreements according to competition rules and we started an investigation about a group of banks, not only British," Joaquin Almunia, EU commissioner for competition, told CNBC.
"We have to look at both what happened before the financial crisis where there was some manipulation and then of course what happened after the financial crisis was there some miscommunication for Barclays to keep the Libor rates down," Nancy Curtin, Chief Investment Officer, Close Brothers Asset Management, told CNBC.
"Yes what happened at Barclays was unfortunate and it shouldn't have happened, but the ability of the British political classes to ramp up what was a problem into a potential disaster, is absolutely staggering," Chris Roebuck, professor at Cass Business School, told CNBC.
"What worries me about the way that this has been approached is that there have been elements of the mob behind this and political opportunism behind this and that worries me because we saw nothing whatsoever from any of these politicians six or seven years ago," Simon Derrick, chief currency strategist at BNY Mellon, told CNBC.
Uwe Parpart, Managing Director, Head of Research, Reorient Financial Markets says the only way Barclays could manipulate Libor rates would be through collusion between other banks.
Marc Lopresti, Managing Partner at securities law firm Tagliaferro & LoPresti calls the probe into interbank offer rates an unprecedented co-operation of regulators in the developed world.