(Reuters) – Microsoft Corp admitted its largest acquisition in the Internet sector was effectively worthless and wiped out any profit for the last quarter, as it announced a $6.2 billion charge to write down the value of an online advertising agency it bought five years ago.

The announcement came as a surprise, but did not shock investors, who had largely forgotten Microsoft’s purchase of aQuantive in 2007, which was initially expected to boost Microsoft’s online advertising revenue and counter rival Google Inc’s purchase of digital ad firm DoubleClick.

Microsoft’s shares dipped slightly to $30.28 in after-hours trading, after closing at $30.56 in regular Nasdaq trading.

The world’s largest software company said in a statement that “the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down.”

Microsoft bought aQuantive for $6.3 billion in cash in an attempt to catch rival Google Inc in the race for revenues from search-related display advertising. It was Microsoft’s biggest acquisition at the time, exceeded only by its purchase of Skype for $8.5 billion last year. But it never proved a success and aQuantive’s top executives soon left Microsoft.

As a result of its annual assessment of goodwill – the amount paid for a company above its net assets – Microsoft said on Monday it would take a non-cash charge of $6.2 billion, indicating the aQuantive acquisition is now worthless.

The charge will likely wipe out any profit for the company’s fiscal fourth quarter. Wall Street was expecting Microsoft to report fiscal fourth-quarter net profit of about $5.25 billion, or 62 cents a share, on July 19.

In addition to the write-down, Microsoft said its expectations for future growth and profitability at its online services unit – which includes the Bing search engine and MSN Internet portal – are “lower than previous estimates”.

The company did not say what those previous estimates were, as it does not publish financial forecasts.

Microsoft’s online services division is the biggest drag on its earnings, currently losing about $500 million a quarter as the company invests heavily in Bing in an attempt to catch market leader Google. The unit has lost more than $5 billion in the last three years alone. Even though its market share has been rising, Bing has not reached critical mass required to make the product profitable.

Before rolling out Bing in June 2009, Microsoft’s Windows search engine had 8 percent of the U.S. Internet search market, compared with Yahoo’s 20 percent and Google’s 65 percent.

In the three years since then, Bing has almost doubled its market share to 15 percent, but that has been mostly at the expense of Yahoo, which has had its share whittled down to 13 percent. Google now has almost 67 percent, according to research firm Comscore.

Yahoo’s internet searches are powered by Microsoft’s Bing under a 10-year agreement initially struck in 2009. Microsoft hands back to Yahoo 88 percent of revenue generated from search ads on Yahoo sites. That deal has not met the ambitious targets set by either company.

(Additional reporting by Siddharth Cavale in Bangalore, editing by Supriya Kurane, Bernard Orr and Richard Pullin)

(Reuters) – A scandal over the rigging of key interest rates could plunge the global banking industry into a legal morass for years, analysts said, as the head of Barclays (BARC.L) fought to hold onto his job.

With the Times newspaper naming RBS (RBS.L) as the next bank facing a fine for its alleged involvement in manipulating the key lending rate between banks, the head of the Bank of England said there needed to be “real change” in the industry’s culture.

Referring to what he called the “deceitful manipulation” of rates, Mervyn King told a news conference on Friday the London Interbank Offer Rate (LIBOR) should be reformed to reflect actual market transactions.

U.S. and British authorities fined Barclays $453 million on Wednesday for manipulating LIBOR, which underpins some $360 trillion of loans and financial contracts around the world – and analysts forecast more banks would soon be named for collusion.

“Reading the statements by the authorities we expect to get settlements by others in the course of time which could be more punitive,” analysts at Credit Suisse said.

Others predicted Barclays and other banks could face billions in costs from litigation, especially in the United States, in much the same way that oil major BP (BP.L) ran into drawn-out legal rows over its oil spill.

“Given the long-tailed nature of investigations we expect this to be a long-term overhang,” said Morgan Stanley analyst Chris Manners.

Barclays was the first bank to settle in an investigation which is looking at other large financial institutions in Europe, Japan and North America, including Citigroup CN.N, HSBC (HSBA.L) and UBS (UBSN.VX). No criminal charges have been filed.

The Times said RBS faced a likely fine of 150 million pounds ($233 million) for participating in market manipulation offences similar to those engaged in by Barclays. The bank said no fine or settlement had been decided upon.

“BOB THE ROB”

The heaviest pressure remained on Barclays chief Bob Diamond, who was running the investment banking arm Barclays Capital when the rigging occurred in 2005-2009, despite his vow not to quit.

Britain’s popular tabloid newspaper The Sun tore into the banker, calling him “Bob the Rob” and saying: “Never in the past four miserable years have bankers been more hated than now.”

Prime Minister David Cameron said Diamond would appear before parliament’s Treasury Select Committee, adding, “He and his management team have serious questions to answer.”

“People are rightly angry about the behavior of the banks and so am I,” Cameron told a news conference in Brussels.

Britain has also called in the fraud squad to investigate possible crimes.

“Politicians have already been baying for blood and calling for the head of Bob Diamond,” said Stephen Peak, manager of the Henderson UK Alpha and European Absolute Return funds and a shareholder in the bank.

“We feel that the Barclays board will instinctively wish to resist this, as Diamond is clearly the architect and leading light of Barclays, but feel that the pressure may be too great.”

Diamond told Morgan Stanley analysts on Thursday he did not intend to stand down and sources close to the bank said Barclays’ shareholders were satisfied with the bank’s decision to come clean and settle.

One fund manager at a top 100 Barclays shareholder said he did not think senior management was to blame for the scandal.

“Realistically, how is the guy sitting several layers above going to have any knowledge of that, unless they were explicitly encouraging it — which they don’t appear to have done in this instance.”

However, he added, neither Barclays or RBS had acted quickly enough to tell shareholders what was happening.

“No-one has come to us to try and explain anything. Barclays have settled early, so they can no longer claim uncertainty of outcomes in the same way but investors are still subject to reasonable uncertainty as to how much this might cost them in the end.”

The father of one Barclays customer described the bank’s behavior as “toxic and disgraceful” and said he would close down his child’s account.

“To learn of this scandal where they are fixing Libor to benefit themselves… I just cannot believe that behavior,” said Lynne Brooke, a Hampshire-based solicitor.

SPREADING SCANDAL

Authorities investigating the Libor scandal are looking at banks in Europe, North America and Japan.

In response to the Times report RBS said it continued to co-operate with regulators on the ongoing investigation, adding any resolution of its case was months away.

“The process is not as far advanced as the (Times) article suggests and there can be no certainty as to the timing or amount of any fine or settlement at this point,” the bank, which is part-nationalized, said in a statement.

Like Diamond, RBS Chief Executive Stephen Hester will waive his bonus this year, a source close to the lender said, but the gesture has been presented as an apology for the recent computer systems failure which caused disruption to millions of customers, and unrelated to the LIBOR probe.

The Barclays rate-fixing affair, which disclosed e-mails in which bankers appeared to promise bottles of champagne to each other for help in setting the rates, has fuelled anger from taxpayers struggling with austerity measures who are now closely watching the banks they bailed out during the financial crisis.

Adding to their ire, the Financial Services Authority said on Friday it had found “serious failings” in the way specialist insurance had been sold by Barclays, RBS, HSBC (HSBA.L) and Lloyds (LLOY.L), concluding they mis-sold products.

Compensation could run into the hundreds of millions of pounds, lawyers have said, although Lloyds and Barclays said the cost for it would not be material.

The FSA said from 2001 to date, banks sold around 28,000 interest rate protection products to customers.

“Such products took advantage of small businesses, many of which could not reasonably have been expected to understand what they were signing up to, at a time when loans were difficult to come by. This is completely unacceptable,” said Andrew Tyrie, head of parliament’s Treasury Select Committee.

A string of mis-selling cases has damaged the financial services industry for over two decades. Banks are already committed to paying upwards of 9 billion pounds ($14 billion) to customers in compensation for mis-selling loan insurance.

Barclays shares closed down 1.7 percent, the weakest major European bank. The EU bank index .SX&P rallied 4 percent after Euro zone leaders agreed emergency action to cut Spain’s and Italy’s borrowing costs.

(Additional reporting by Sinead Cruise, Matt Scuffham and Peter Griffiths; writing by Sophie Walker; editing by Philippa Fletcher)

(Reuters) – Federal Reserve officials on Friday said they were keeping an eye out for any signs that slowing growth is raising deflation risks but differed on how worrisome sluggish job markets are for the modest U.S. economic recovery.

New York Federal Reserve Bank President William Dudley, a close ally of the U.S. central bank’s chairman, Ben Bernanke, said he had modestly lowered his expectations for inflation in coming months.

He said he would need to see more information on the U.S. jobs market and the unfolding of the European sovereign debt crisis before having a clearer sense of the health of the U.S. economy.

A permanent voter on the Fed’s policy-setting panel, Dudley said employment growth has “slowed considerably of late” as the economy has lost momentum.

The New York Fed leader has a reputation as a policy dove and has supported aggressive measures to boost growth and bring down high unemployment. He focused on the economic outlook and did not discuss in any detail the Fed’s decision last week to boost monetary stimulus for the sluggish U.S. recovery or whether more monetary easing might be needed.

“Although some of the current uncertainties will take time to resolve, I can imagine material data on a number of dimensions could become available in the coming weeks and months that could lead me to adjust my forecast further,” Dudley told the Puerto Rico Chamber of Commerce.

“I will be paying particularly close attention to whether domestic momentum and hiring picks up now that the pay-back for the mild winter is over, and whether financial conditions, which are heavily influenced at present by developments in Europe, ease or tighten further,” he said.

Another policymaker who has opposed expanding Fed support for the recovery, St. Louis Fed President James Bullard, said he had argued against the expansion last week of the portfolio rebalancing initiative referred to as Operation Twist, but ultimately supported Bernanke’s decision.

Bullard also said it would take more than a continuation of weak job growth to spur the Fed to a third round of quantitative easing.

“To get to QE3 you’d have to see a sharp drop-off in economic activity in the U.S. or a clear threat of deflation,” he told reporters after a speech to local business and community representatives. “I don’t think, at least as things stand right now, we don’t see either one of those.”

Bullard said that he anticipates sluggish job growth in coming months. The St. Louis Fed president is not a voter this year on the policy-setting panel and is seen as being at the center of the spectrum of Fed views, which shade from urging greater action to lower the jobless rate to concern that ultra-easy money should be curtailed at the earliest opportunity.

Three consecutive months of disappointing U.S. jobs growth and the simmering euro zone debt crisis led the Fed at its latest scheduled meeting last week to extend by six months and $267 billion a bond maturity-extension program called Operation Twist.

The Fed cut U.S. interest rates to near zero more than three years ago and has pledged conditionally to hold benchmark borrowing costs at that level through late 2014 in an effort to spur growth. The central bank has also bought $2.3 trillion in bonds through its first two quantitative easing initiatives.

Also last week, the Fed slashed its expectations for economic growth over the next two years and trimmed an inflation prediction, while raising expectations for the unemployment rate, which in May stood at 8.2 percent.

However, it held off on another round of bond-buying.

Wall Street bond firms polled after the Fed’s most recent meeting saw a 50 percent chance of another asset purchase program.

Some Fed officials have suggested risks from the euro zone crisis point to a need for further easing measures as a precaution. However, Bullard said risks from that crisis have caused only modest strains in U.S. financial markets.

Another Fed official, Boston Fed President Eric Rosengren, on Friday suggested expanding bank “stress tests” to include the likely support those institutions would need to provide to sponsored money market mutual funds.

The vulnerabilities of money market mutual funds, which, unlike bank accounts, do not offer deposit insurance, came to light during the 2007-2009 financial crisis, and have surfaced anew in connection with the euro zone upheaval.

New York’s Dudley voted for the Operation Twist extension despite having said on May 30 that, for now, additional Fed stimulus was not warranted.

Giving more detail than in a speech a month ago, and citing falling gasoline prices, Dudley on Friday said he expects inflation to decline “a bit in coming months, falling somewhat further below our 2-percent objective.”

Illustrating competing views that are likely to make any Fed decision on further action highly contentious, Bullard repeated his more hawkish warning that the Fed’s bloated balance sheet – which has ballooned to around $2.8 trillion as a result of its bond-buying sprees – could be an inflation risk if the recovery accelerates suddenly.

However he also said that inflation is not now a problem and that there is no danger of an inflationary psychology taking root. Bullard acknowledged that gross domestic product growth is falling short of expectations, saying he had lowered his GDP forecast for 2012 to a 2.4 percent annual rate of increase.

(Editing by James Dalgleish)

(Reuters) – Wall Street rallied on Friday, with major indexes trimming quarterly losses, after euro zoneleaders agreed to allow rescue funds to be used to stabilize the region’s banks.

Details of the agreement, which includes the creation of a single supervisory body for euro area banks, remain to be worked out. But Italian and Spanish borrowing costs fell, though they remained not far from recent highs, as market expectation for any action during a two-day European Union summit had all but vanished.

“We’ve gotten used to being underwhelmed by the outcomes, so with little to no expectations for success, the fact that it appears we are going to get something substantial is a real important positive for the market in the near term,” said Art Hogan, managing director of Lazard Capital Markets in New York.

“It’s inching closer to a banking union and the closer we get to a banking union would put (the EU) well on the road to a fiscal union.”

U.S. Bank stocks were among the market leaders as the risk of exposure to their European peers diminishes. The KBW bank index .BKX jumped 2.3 percent led by a 4.4 percent rise in shares of Citigroup (C.N).

Brent and U.S. crude prices soared more than 4.5 percent on the back of the EU agreement and further boosted by a near 2 percent jump in the euro against the U.S. dollar. The S&P energy sector .GSPE added 2.2 percent.

Equities and other risky assets have recently been weighed by concerns that stubbornly high borrowing costs in Spain and Italy could force the fourth- and third-largest economies in the bloc to seek bailouts.

The Dow Jones industrial average .DJI rose 219.33 points, or 1.74 percent, to 12,821.59. The S&P 500 Index .SPX gained 25.91 points, or 1.95 percent, to 1,354.95. The Nasdaq Composite.IXIC added 63.22 points, or 2.22 percent, to 2,912.71.

The steep gains trimmed a quarterly decline in the S&P 500 to just under 4 percent. The benchmark has, so far, gained 3.2 percent in June.

Trading could be volatile and see higher than average volumes as managers square positions ahead of the end of the second quarter. The outperformance of bonds in the past three months could trigger inflows into stocks and extend the expected rally.

The EU summit news overshadowed a batch of mixed U.S. data. Attention in Europe now turns to next week’s European Central Bank meeting. The consensus is that the bank will cut its main refinancing rate by 25 basis points to 0.75 percent and may trim the deposit rate – the rate it pays banks for parking money with it – by 25 basis points to 0 percent.

Hospitals and insurers providing Medicaid plans for the poor were the main corporate winners from the U.S. Supreme Court’s decision Thursday to uphold President Barack Obama’s Affordable Care Act, as they prepare to see an influx of customers with no prior access to healthcare.

U.S.-traded shares of Research in Motion (RIMM.O) tumbled 16.5 percent to $7.62 in the wake of the company’s decision Thursday to delay the make-or-break launch of its next-generation BlackBerry phones until next year.

Nike (NKE.N) shares dropped 10.9 to $86.34 percent a day after the world’s largest sportswear maker missed quarterly profit estimates for the first time in at least two years.

Shares of KB Homes (KBH.N) rose 6.1 percent to $9.23 after the fifth-largest U.S. homebuilder reported a narrower second-quarter loss, helped by higher sale prices and net orders.

(Editing by Bernadette Baum, Dave Zimmerman)

(Reuters) – The U.S. economy grew only modestly in the first quarter, the government confirmed on Thursday in a report that underscored the economy’s vulnerability as global growth slows.

Gross domestic product rose at a 1.9 percent annual rate, with motor vehicle output accounting for more than half the gain, the Commerce Department said. The growth pace, which was unchanged from a prior reading, marked a sharp step down from the fourth quarter’s 3 percent advance.

Auto production contributed 1.16 percentage points to GDP growth, reflecting pent-up demand that has since waned.

Excluding autos, GDP grew at only a 0.7 percent rate.

“Given that domestic growth is being generated by the autos sector, as we go into the second quarter, a pretty soft outcome looks likely,” said Jeremy Lawson, a senior economist at BNP Paribas in New York.

A separate report from the Labor Department showed the number of Americans filing new claims for jobless benefits edged down last week, but remained in a range that indicated the job market was still struggling to gain traction.

Most economists estimate second-quarter growth at around 2 percent, but they say risks are stacked to the downside, given the debt troubles in Europe and an unclear fiscal policy path at home, which are sapping business and consumer confidence.

“We view the economy as vulnerable to negative shifts in sentiment and escalating uncertainty,” said Michael Gapen, a senior economist at Barclays in New York.

CONSUMER SPENDING, EXPORT GROWTH LOWERED

The government lowered its previous forecasts for consumer spending and export growth, suggesting the economy had a bit less momentum as it entered the second quarter than previously thought.

Consumer spending, which accounts for about 70 percent of U.S. economic activity, increased at a 2.5 percent rate in the first quarter, rather than the previously reported 2.7 percent pace.

With retail sales falling in April and May, consumer spending for the second quarter may prove softer.

Exports grew at a 4.2 percent rate in the first three months of the year instead of 7.2 percent. The government has already said they declined in April, reflecting softening demand in China and Europe.

Weak global demand also hurt corporate profits in the first quarter. After-tax corporate profits were lowered to show a 5.7 percent rate of decline instead of 4.1 percent. That was the first decline since the fourth quarter of 2008.

“It highlights that the U.S. is not immune from the weakness in the rest of the world. Corporate profits are likely to remain under pressure, a development that is unlikely to help the employment outlook,” said Lawson.

There were some positives in the GDP report, which showed stronger investment in residential and nonresidential structures than estimated earlier. Businesses also kept a careful management of inventories, which could be a boost to second-quarter growth.

However, if domestic demand weakens further, businesses might be forced to scale back on restocking. An easing in consumer spending is also a likely prospect given the travails of the labor market.

Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 386,000, the Labor Department said, keeping them in a range that suggests little improvement in the pace of layoffs.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 15,000 to 3.3 million in the week ended June 16. That covered the survey period for June’s unemployment rate.

In May, the jobless rate rose to 8.2 percent as people re-entered the labor force to hunt for work.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Tim Ahmann)

(Reuters) – Morgan Stanley (MS.N) has appointed Robert Herz, a former chairman of the Financial Accounting Standards Board (FASB), to its board of directors and made some changes to its board committees.

The appointment of Herz, a former partner of accounting firm PricewaterhouseCoopers PWC.UL, is effective July 2.

The investment bank’s board also changed the leadership of its nominating and governance committee, replacing Laura Tyson with James Owens as chairman. Klaus Kleinfeld, a relatively new director, was also added to that group. Kleinfeld joined the board in May to replace outgoing board member James Hance.

Other committee changes related to the departure of Hance, who had served on the audit, risk and operations and technology committees. Herz joined the audit committee, while Owens and Tyson were added to the risk committee. O. Griffith Sexton joined the operations and technology committee.

The addition of Herz brings the number of Morgan Stanley directors to 14.

Herz chaired FASB from July 2002 to September 2010. He was also previously a member of the International Accounting Standards Board and currently serves on the board of Fannie Mae (FNMA.OB).

(Reporting By Lauren Tara LaCapra; Editing by Gerald E. McCormick and John Wallace)

(Reuters) – U.S. consumer spending and export growth were not as robust as previously believed in the first quarter, suggesting less momentum in the economy.

The Commerce Department confirmed on Thursday that the economy grew at a 1.9 percent annual pace in the January-March period, but the mix of growth was not encouraging for the current quarter.

A separate report showed the number of Americans filing new claims for jobless benefits fell last week, but remained too high, indicating the job market was struggling to gain traction.

Economists said the stream of weak data could prompt the Federal Reserve to launch a third round of bond purchases to support the flagging recovery.

The U.S. central bank last week eased monetary policy further by extending a program to re-weight bonds it already holds toward longer maturities to hold down borrowing costs.

Consumer spending, which accounts for about 70 percent of U.S. economic activity, increased at a 2.5 percent rate in first quarter, rather than the previously reported 2.7 percent pace.

There are signs that consumer spending slowed in the second quarter, with retail sales falling in April and May.

Exports grew at a 4.2 percent rate instead of 7.2 percent. The loss of momentum in both consumer spending and exports bodes ill for second-quarter growth.

Second-quarter growth is forecast around 2 percent, but with global demand cooling amid Europe’s debt woes and an uncertain fiscal policy path at home forcing households to be cautious, even that estimate might be too optimistic.

Business inventories increased $54.4 billion, instead of $57.7 billion, adding only 0.10 percentage point to GDP growth compared with 0.21 percentage point in the previous estimate.

Excluding inventories, the economy grew at a revised 1.8 percent rate in the first quarter, rather than 1.7 percent and up from 1.1 percent in the fourth quarter.

The careful of management of inventories could be a boost to second-quarter growth, but if domestic demand weakens further, businesses might be forced to scale back on restocking.

That is a likely prospect as the labor market struggles to find momentum.

Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 386,000, the Labor Department said. The four-week moving average for new claims, considered a better measure of labor market trends, slipped 750 to 386,750.

The labor market has lost a step in recent months as uncertainty spawned by the debt crisis in Europe and an unclear fiscal policy path at home has made businesses reluctant to hire.

Jobless claims have barely moved since April and the lack of improvement suggests a fundamental weakness in the labor market.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 15,000 to 3.3 million in the week ended June 16.

That covered the survey period for June’s unemployment rate. The jobless rate rose in May for the first time since last August and could remain elevated as most states stop offering extended benefits to the long-term unemployed.

Only six states and the District of Columbia were offering extended benefits in the week ended June 9. A total of 5.9 million people were claiming unemployment benefits under all programs during that period, up 71,724 from the previous week.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

(Reuters) – Exxon Mobil (XOM.N) would be interested in investing in Mexico’s oil and gas sector, but only if the Mexican government allows the company to own some energy reserves, its chief executive said on Wednesday.

“We’re not real keen on service contracts, we’re not real keen on fixed margin contracts. Although we have some of those, they’re not particularly great for us,” Exxon Mobil CEO Rex Tillerson told reporters after a speech.

Mexico’s constitution bars outside exploitation of the country’s oil resources, making joint ventures or profit sharing with private companies difficult.

But the country has been seeking to open the door to attract investment from foreign oil and gas producers to help tap the vast reserves there.

Mexico’s state oil monopoly Pemex PEMX.UL awarded contracts to some foreign companies earlier this month to help develop offshore fields, but those contracts pay bonuses based on performance and do not allow for ownership of oil and gas.

Tillerson said he was encouraged by the initial moves to open the Mexican energy sector, which could eventually attract financing and technology from the global industry.

“I think it’s going to be a long process. And what we’re advocating is just for Mexico to take the next step,” he said.

In addition to its offshore oil fields, Mexico has the world’s fourth-largest reserves of shale gas, according to the U.S. Energy Information Administration.

But so far, Pemex has drilled relatively few wells in the those fields near the Rio Grande because it has little capital to develop those areas.

Tillerson also said the United States, Canada and Mexico should work together to develop energy supplies and promote “energy security” that would keep a flow of oil and gas to North America.

Currently, North America produces about 15 million barrels of oil per day, he said, and Exxon expects that figure to grow to 18 million barrels a day by 2020.

“That is a force to be dealt with in global oil markets,” he said.

“It’s my hope that at some point energy security can become a policy issue in our foreign policy discussion with Mexico, Canada and the United States,” he said.

(Reporting by Matt Daily; Editing by Leslie Gevirtz)

(Reuters) – British bank Barclays will pay at least $450 million to U.S. and British authorities to settle a probe into manipulation of the key interbank lending rate known as Libor.

Regulators have been investigating allegations that several banks, including Barclays, manipulated the London Interbank Lending Rate (Libor), which underpins trillions of dollars of derivatives contracts worldwide and is also widely used as a reference rate for corporate lending.

Barclays regularly reported borrowing rates lower than the rates it was actually paying during the financial crisis, in order to mask its distress, according to a statement from the U.S. Commodity Futures Trading Commission on Wednesday.

Damning emails that regulators released on Wednesday make clear that traders and the “submitters” tasked with reporting daily rates worked together for years to make the rates submitted suit the traders’ and the bank’s purposes.

In some cases, submitters set themselves reminders on their calendars to submit low rates on certain dates, according to the emails. In others, traders expressed overwhelming gratitude for low submissions that protected them from losses.

The U.S. CFTC said Barclays attempted to manipulated Libor submissions “sometimes on a daily basis” over a four-year period starting in 2005. The CFTC ordered the bank to pay a $200 million penalty, saying it was the largest civil monetary penalty it has ever imposed.

Barclays also settled with the U.S. Department of Justice and the UK’s Financial Services Authority and will pay fines of $160 million and $92.8 million, respectively.

The Department of Justice said Barclays was the first bank being probed “to provide extensive and meaningful cooperation to the government,” adding that the bank’s assistance had aided its criminal investigation.

In March the bank said it was engaged in a possible resolution with regulators looking into potential enforcement proceedings.

As well as the FSA and CFTC, other authorities probing Libor manipulation include the European Commission and Japan’s Financial Services Authority.

Other banks involved in the probe include Citigroup, HSBC, Royal Bank of Scotland and UBS.

Several banks have suspended traders over the investigations. No criminal charges have been filed.

Libor is the benchmark for about $360 trillion worth of financial contracts worldwide. A daily poll asks banks at what rate they think they will be able to borrow money from one another in 10 major currencies and for 15 borrowing periods, ranging from overnight loans to 12 months.

Thomson Reuters Corp is the British Bankers’ Association’s official agent for the daily calculation and publishing of the Libor rates. A spokesman for the company was not immediately available for comment.

As the credit crisis took hold in 2008, allegations started mounting that Libor no longer reflected banks’ real borrowing costs, and authorities began examining whether traders tried to influence whether the rate went up or down to profit on bets on its future direction.

(Reporting by Steve Slater, Kirstin Ridley, Sarah White, Carrick Mollenkamp, Alexandra Alper and Karey Wutkowski; Writing by Kirstin Ridley in London and Ben Berkowitz in New York; Editing byMatthew Tostevin, John Wallace and Matthew Lewis)