NBF replaces Barclays on Eibor

Central Bank of UAE today confirmed rumours that National Bank of Fujairah has replaced Barclays Bank in the panel tasked for affixing the Emirates Interbank Offered Rate, or Eibor.

“Following the withdrawal of Barclays Bank from the Eibor fixing process, the National Bank of Fujairah was selected by the Eibor panel banks to join the Eibor panel, starting October 8, 2012,” the Central Bank said in a media statement this morning.

“The Eibor rates are set by a panel of 12 banks on a daily basis for various tenors by excluding the two highest and the two lowest from the submitted rates and taking the average of the rest,” the Central Bank statement added.

Barclays Bank opted out of the Eibor panel in July this year, weeks after it agreed to pay a fine of $451 million for attempting to manipulate Libor rates, the world’s benchmarking borrowing rate.

Documents released by the US Commodity Futures Trading Commission, the US Justice Department and the UK Financial Services Authority revealed that traders at England’s second-biggest bank by assets routinely coordinated with counterparts from at least four other banks in an attempt to move interest rate benchmarks.

The benchmarks included the London Interbank Offered Rate, or Libor, and Euribor, a related euro- denominated rate. In both cases, the goal was to generate profits on derivatives held by the banks, the agencies said.

There have been no suggestions that Barclays was involved in any wrongdoing in the case of Eibor, and its withdrawal from the UAE panel is largely seen as voluntary.

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