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By Bloomberg

The British Bankers’ Association considered pressing its members to simultaneously increase Libor submissions during the financial crisis to tackle the problem of low-balling.

The strategy was discussed at the trial of London trader Thomas Hayes, whose lawyers are cross-examining the BBA’s Libor director, John Ewan. The 35-year-old Hayes is accused of eight counts of conspiracy to manipulate the London interbank offered rate.

At a board meeting in April 2008, the BBA, which oversaw the rate, discussed how to persuade bank executives to adjust submissions at once, removing the stigma that would face individual banks that suddenly submitted accurate rates.

We recommend “coordinated action by a large number of panel banks, directed by the most senior level,” then BBA Chief Executive Officer Angela Knight wrote in a memo accompanying the board meeting that was shown to the jury Tuesday. “If we can orchestrate a coordinated movement, no single bank need be out of line with the rest of the contributors.”

During the 2008 financial crisis, banks were accused of “low-balling” their Libor submissions to appear healthier than they were. Libor, a benchmark for financial products worldwide, was calculated by a poll carried out daily on behalf of the BBA that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies.

Lawyers for Hayes, a former trader at UBS Group AG and Citigroup Inc., argue that knowledge of Libor manipulation was widespread.

Borrowing Levels

In a series of meetings at various bank headquarters in the weeks before the meeting, Ewan was told that banks’ dollar Libor submissions were consistently 20 to 30 basis points lower than banks actual borrowing levels, according to minutes of the meeting shown to the jury.

Earlier, Ewan testified that he was not aware that banks were low-balling their rates and that he first learned that traders were adjusting their rates for profit was when Barclays Plc became the first bank to settle over Libor in 2012.