Sixteen lenders accused of Libor manipulation
SOME of the biggest banks across the UK, US and Europe are being sued by the Federal Deposit Insurance Corporation (FDIC) in the US over claims their traders manipulated Libor interest rates.
The regulator is launching legal action against 16 banks, including HSBC, Barclays, RBS, JP Morgan and Deutsche Bank.
The British Bankers’ Association (BBA) was also named in the documents filed in a New York court.
The BBA administered Libor from its inception in the 1980s until a shakeup after the scandal hit the benchmark in mid-2012.
The FDIC claims the banks’ traders tried to fiddle the key interbank interest benchmark, to the detriment of US lenders which eventually went bust in the financial crisis.
It is arguing that “substantial losses” were inflicted on 38 banks by the manipulation. The FDIC acted as receiver for those lenders when they collapsed.
The legal filing accuses the banks which made the interest rate submissions on which Libor was based from 2007 to 2011 of “fraudulently and collusively” fiddling the rate.
Bankers have been accused of trying to move the rate up and down in the years before the financial crash in a bid to make more money on their and their colleagues trading positions.
Bank of America, Citigroup, Credit Suisse, RBS, Rabobank, Lloyds Banking Group, Societe Generale, Norinchukin Bank, Royal Bank of Canada, Bank of Tokyo-Mitsubishi UFJ and WestLB were all named in the suit.
Barclays, RBS and UBS have all paid fines in the UK and US related to the alleged attempts to manipulate the Libor level.
The banks accused in the case declined to comment, as did the British Bankers’ Association.