“mate yur getting bloody good at this libor game . . . think of me when yur on yur yacht in monaco wont yu,” wrote one to another. LIBOR depends on banks self-reporting lending rates. But misreporting may have offered a falsely rosy impression leading up to the credit crunch, with banks reporting they could borrow more cheaply than they actually could.

As the quote shows, participants were blithe about what they were doing. One online chat room even referred to itself as “the cartel.” Documents record multiple cases of debates about who to allow in, who to keep out, and how to know whether to trust someone. In one case, a Barclays employee asked to join, but was invited only on a probationary basis—and with a threat:

After extensive discussion of whether or not this trader “would add value” to the Cartel, he was invited to join for a “1 month trial,” but was advised “mess this up and sleep with one eye open at night.”

In some cases, as in this one from UBS, bankers rewarded each other with booze for their work:

Broker-A1: think [Broker-A2] is your best broker in terms of value added :-)

Trader-1: yeah . . . i reckon i owe him a lot more

Broker-A1: he's ok with an annual champagne shipment, a few [drinking sessions] with [his supervisor] and a small bonus every now and then

Generally, the atmosphere was one of mutual encouragement and aggrandizement:

Subsequent to the fix, traders in the chat rooms congratulated one another by saying: “nice work gents…I don my hat”, “Hooray nice team work”, “bravo…cudnt been better” and “have that my son…v nice mate” and “dont mess with our ccy [currency]”. One of the traders commented “there you go … go early, move it, hold it, push it”. HSBC stated “loved that mate… worked lovely… pity we couldn’t get it below the 00” and “we need a few more of those for me to get back on track this month.”

Ostensibly, the figures involved were competing with each other, rivals for the same money. In practice, it seems they were pulling together. As a Barclays employee noted, “the less competition the better.” A sense of camaraderie pervades conversations, as the groups band together even against their own firms. Discussing a possible participant, one Citibank trader wondered, “is he gonna protect us like we protect each other against our own branches[?]”

Making money, even at customers’ expense, was cause for celebration. A bank might effectively lie to its customers about the price of foreign currency and pocket the difference, a Barclays vice president boasted:

markup is making sure you make the right decision on price . . . which is whats the worst price i can put on this where the customers decision to trade with me or give me future business doesn’t change . . . if you aint cheating, you aint trying.

Bankers also used codes and signals to jack up the amount customers would be charged:

Certain UBS FX salespeople and traders used hand signals during certain customers’ “open line” calls in order to conceal from customers that they were being marked up. For example, unbeknownst to the customer, a salesperson would hold up two fingers to signal that the trader should add mark up of “two pips” to the quoted price.

Remarkably, these conversations were conducted in online chat rooms, where they were legally discoverable. Not that there wasn’t concern. “[A]ll senior management ... want to show the world we are the strongest bank with loads of liquidity,” one UBS trader complained about his firm’s low submissions. “We’d lend at 0 US! Has been a lot of media focus on barclays libor fixes so they are paranoid.”