Rabobank, which began life as an agriculture cooperative in the Netherlands in the late 19th century, has become the largest Dutch lender and a modest player on the stage of world finance.
On Tuesday, it also joined the ranks of institutions tarnished by the global rate-setting scandal.
Rabobank is the fifth financial firm to settle investigations related to its role in manipulating the benchmark known as the London interbank offered rate, or Libor, which helps set consumer and corporate borrowing rates around the world.
The settlement documents from British and United States regulators offer the latest in incriminating messages.
The Financial Conduct Authority of Britain says that Rabobank tried to manipulate yen Libor rates by colluding with brokers. It gives this November 2010 exchange:
Broker 1: ok we need lower libors tomorrow yes?
Trader 1: Yeah . . .
Broker 1: ok ill work some magic for tomorrow
Such discussions were frequent. One trader noted that traders were used to “help[ing] ourselves to the Libors,” according to the British regulator.
Submissions for the United States dollar Libor were made out of Rabobank’s office in London, according to authorities.
From the middle of 2005 through 2008, a senior derivatives trader known as the Ambassador made requests for preferential Libor submissions, the Commodity Futures Trading Commission says in its order. If the Ambassador’s requests were not honored, he “complained and angrily expressed his displeasure,” says the order, which gives the following 2006 exchange (all caps in the original):
U.S. Dollar Trader: HI MATE, LOW 1S HIGH 3S LIBOR PLS!!! DONT TELL THE MBASS HAA HAAAAAAA. SOLD THE MARKET TODAY DOOOOHHHH!
Senior Manger 1: OK MATE, WILL DO MY BEST….SPEAK LATER
U.S. Dollar Trader: CHEERS GEEZ, BANG ON THE MONEY!
Senior Manager 1: NO WORRIES, I HAD TO WORK MY WAY OUT OF AN AMBASS HEADLOCK TO GET THOSE IN!
Some of the exchanges cited by regulators indicate how commonplace and easy it was for traders to submit rate requests, like this October 2008 yen Libor exchange:
Yen Desk Manager 1: Morning, mate, aright? …. LIBORS today, LIBORS, LIBORS, same?
Senior Manager 1: Where want ’em?
Yen Desk Manager 1: …. smidgen lower?”
A December 2008 email from a senior manager in Rabobank’s Asian offices says of a yen-trader submitter that the “only question mark for me is him sending out daily Rabo Libor fixing. He told me he will just ‘copy, paste’ the previous days Libors.”
The requests from traders could be relentless.
Submitter B: you’re ringing about six-month Yen Libor again aren’t you?
Trader 1: Yes, yes, yeah
Submitter B: That’s all you’re, that’s all you care about for the moment, isn’t it?
In rate manipulation schemes, as with many things, communication can be crucial, as this 2010 missive makes clear:
WHY DID YOU PUT ALL THE YEN LIBORS HIGHER FOR TODAY WITHOUT TELLING ME? WHERE IS THE TEAM PLAY? YOU KNOW WHAT MY POSITION IS? I CAN”T BELIEVE YOU DID THIS WITHOUT TELLING ME