Lloyds fined £218m over Libor rate-rigging scandal

Part of the Libor misconduct came after pressure from a manager over market perception of its financial stability during the financial crisis, the FCA found, as well as attempts to boost trading positions.

A trader quoted by the FCA said: "I've been pressured by senior management to bring my rates down into line with everyone else."

Libor rigging also resulted in a £62 million pay-out to America's Commodity Futures Trading Commission and £52 million to the US Department of Justice.

The FCA fine relates to the behaviour of Lloyds TSB and Halifax Bank of Scotland, part of the same wider group and at the centre of the financial crisis. Lloyds Banking Group remains 25% owned by the taxpayer following its rescue.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "The firms were a significant beneficiary of financial assistance from the Bank of England through the SLS.

"Colluding to benefit the firms at the expense, ultimately, of the UK taxpayer was unacceptable."

The repo rate probe covered a period between April 2008 and September 2009, involving four individuals - a manager and a trader at each firm.

Libor rigging took place between May 2006 and June 2009, with 16 individuals directly involved, seven of them managers - including one who was also involved in the repo misconduct.

The FCA said: "At both firms there was a culture on the money market desks of seeking to take a financial advantage wherever possible."

In one exchange it published, a trader was quoted telling a manager: "every little helps... it's like Tescos."

The FCA did not find there was "deliberate misconduct" by the banks but found that because of poor culture, and weak systems and controls, they "failed to prevent the deliberate, reckless and frequently blatant actions of a number of their employees".

Lloyds said "The issues subject to the settlements were restricted to a specific area of the business and were not known about or condoned by the senior management of the group at that time.

"The individuals involved have either left the group, been suspended or are subject to disciplinary proceedings. The group's board will now consider all the remuneration implications and potential actions available to it."

Lord Blackwell said: "The board regards the actions of these individuals between 2006 and 2009 as completely unacceptable. Their behaviour involved a gross breach of trust and we condemn it without reservation."

Chief executive Antonio Horta-Osorio said: "The behaviours identified by these investigations are absolutely unacceptable. We take the findings of these investigations, which relate to issues from some years ago, extremely seriously.

"Together, the board and the group's management team have taken vigorous action over the last three years to prevent this kind of behaviour, through closing or reducing our legacy investment banking activities."