July 24 (Reuters) - The long-awaited fine on Britain's Lloyds Banking Group in relation to the benchmark interest rate (LIBOR) fixing allegations will be announced next week, two sources familiar with the inquiry told Reuters.
One source said the settlement, which will be the seventh joint UK and U.S. penalty in this inquiry, could be in the ballpark of 200 million to 300 million pounds.
Deutsche Bank is expected to be the eighth bank to settle U.S. and UK allegations of manipulating benchmark interest rates, which are used to price around 450 trillion dollars of financial products worldwide.
Britain's Financial Conduct Authority said in 2012 it expected to reach eight "global" U.S.-UK settlements with financial institutions over the rate-rigging allegations, although it has not ruled out the possibility of pursuing more institutions alone.
Including fines dished out by the antitrust regulator, the European Commission, on cartel grounds, a total of 10 banks and brokerages have been fined around $6 billion for benchmark interest rate manipulation to date. Seventeen men have been criminally charged.
The Financial Times reported earlier on Thursday that Lloyds is expected to announce the settlement before declaring its first-half results, citing people familiar with the situation. (http://on.ft.com/1mK7C1q)
Lloyds, FCA, CFTC and DoJ could not immediately be reached for comment. ($1 = 0.5888 British Pounds) ($1 = 0.5887 British Pounds) (Reporting by Aashika Jain in Bangalore, Kirstin Ridley and Matt Scuffham in London; editing by Gunna Dickson)
The Bank of England’s Monetary Policy Committee says lenders have underestimated the Mortgage Market Review’s impact on lending volumes.
According to minutes from the committee’s June meeting, published yesterday, lenders have reported a reduction in purchase and remortgage approvals since the MMR but expected both would “return to a normal level” by the end of July.
However, the MPC believes the new regulations could have an impact on consumers’ confidence in their ability to get finance and therefore continue to suppress lending volumes.
The minutes say: “Mortgage lenders had indicated that MMR had been a factor reducing the volume of approvals for house purchase and remortgaging in May. Most had said that they would be able to return to a normal level of business by the end of July.
“But the MMR might well have a more persistent impact on the behaviour of some borrowers, by influencing the terms or availability of credit. It might take [borrowers] time to adjust downwards their expectations about what was affordable and to redirect their search. During this time, both transactions and lending would be lower.”
A spokesman for the Council of Mortgage Lenders says: “Based on data we have seen so far, which is only for the first couple of months following MMR, there are no signs of any clear effects of the new regulations in terms of dampening down the market – but it is too early to draw conclusions.
“We do believe that a combination of factors, including the FPC criteria changes and the MMR, are pushing us towards a more conservative lending environment.”
In May, brokers warned that buyers could miss out on properties as a result of delays caused by the MMR, including waiting times of up to 20 weeks for cases to complete.
"IF by a a minor miracle we get to 80 85p who is selling looking to buy in cheaper?" - not me. The only thing limiting this stock to 85p is no dividend. Once it's announced you remove the uncertainty the markets hate and you have all the hedge funds buying in. Once they know a 4-5% yield is there they will buy up to whatever price makes sense to achieve that. The SP would rocket to 100p on a 4-5p div announcement (for 2015) but I think we are counting our chickens. It may be a little to early for the relevant authorities to grant LLOY permission to give a dividend without first passing the EU stress test in October.
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