Budget 2013: Libor fines go to military causes

20 March 2013


Money from fines imposed on banks that had rigged interest rates has been paid to military causes, the chancellor announced in his Budget today.
George Osborne said: "Further awards from the Libor [London inter-bank offered rates] banking fines have gone to good military causes, with money for Combat Stress to help veterans with mental health issues and funds for Christmas boxes for all our troops on operations this year and next.
"Those who have paid fines in our financial sector because they demonstrated the very worst values are paying to support those in our armed forces who demonstrate the very best of British values."
Osborne announced in February that three military charities would share £1.3 million from Libor fines. The three charities support injured soldiers, provide tickets to events and pay for holidays for bomb disposal teams.
Beyond his brief comment in today's Budget speech, the Treasury did not reveal any further information about how the money was spent or how much money had been paid in total to military causes.
However, the Budget 2013 document shows that £300 million of income from Libor fines has been received by the Treasury; but it was not included in some of its calculations as it was not included in Budget 2012 totals.
Fines collected by the Financial Services Authority are normally kept by the authority and used to lower the membership fees that financial services pay to the City watchdog. Osborne previously announced that money from Libor fines would be diverted to good causes though.
However, on 1 April all fines will be directed into the Treasury's coffers. The change, which is part of the Financial Services Bill, will apply retrospectively to all fines that the FSA has levied since 1 April 2012. 
Penalties imposed from April to December 2012 totalled more than £287 million. The largest fine in that period was paid by UBS – a massive £160 million – for its misconduct over Libor and the euro rate.

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