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9 More Banks Under Scrutiny in Libor Investigation

State investigations into potential manipulation of the London Interbank Offered Rate (Libor) by major banks have expanded to include 16 institutions with the issuance of subpoenas to nine more banks by New York Attorney General Eric Schneiderman. The investigations are examining whether banks attempted to manipulate Libor submission rates to benefit trading positions or appear stronger during the financial crisis. Multiple state attorneys general and some international authorities are investigating whether governmental entities incurred financial losses due to Libor rate manipulation by banks.

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Bhavesh Bajaj
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50 views3 pages

9 More Banks Under Scrutiny in Libor Investigation

State investigations into potential manipulation of the London Interbank Offered Rate (Libor) by major banks have expanded to include 16 institutions with the issuance of subpoenas to nine more banks by New York Attorney General Eric Schneiderman. The investigations are examining whether banks attempted to manipulate Libor submission rates to benefit trading positions or appear stronger during the financial crisis. Multiple state attorneys general and some international authorities are investigating whether governmental entities incurred financial losses due to Libor rate manipulation by banks.

Uploaded by

Bhavesh Bajaj
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd

9 more banks under scrutiny in Libor investigation

By James O'Toole @jtotoole October 26, 2012: 2:46 PM ET


Email Print Money'

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A state investigation into whether some of the world's biggest banks manipulated key global interest rates has widened to 16 institutions, according to a source familiar with the matter.
e( "or) state *ttorney +eneral Eric ,c-nei.erman iss/e. s/b0oenas to nine ban)s in late */1/st as 0art o2 an in3esti1ation into alle1e. mani0/lation o2 t-e 4on.on 5nterban) O22ere. #ate, or 4ibor, accor.in1 to t-e so/rce, (-o (as not a/t-ori6e. to s0ea) 0/blicly7 T-e 4ibor 0rocess 1enerates rates, base. on a s/r3ey o2 ban)s, t-at are /se. as benc-mar)s 2or ro/1-ly 810 trillion o2 loans an. some 89:0 trillion o2 .eri3ati3es7 5n J/ne, ;7$7 ban) Barclays %B&,' a.mitte. to mani0/latin1 4ibor to a00ear stron1er ./rin1 t-e 2inancial crisis an. to bene2it its tra.ers' 0ositions7 *s 0art o2 a settlement (it- ;7,7 an. ;7$7 re1/lators, t-e ban) a1ree. to 0ay 84:9 million7 #elate.: E<0lainin1 t-e 4ibor interest rate mess ,ince t-en, ot-er ban)s in3ol3e. in settin1 4ibor -a3e come /n.er scr/tiny7 ,c-nei.erman 0re3io/sly s/b0oenae. Barclays, &iti1ro/0 %&, =ort/ne :00', >e/tsc-e Ban) %>B', ?,B& %?B&', JPMor1an %JPM, =ort/ne :00', #oyal Ban) o2 ,cotlan. %#B,' an. ;B, %;B,' in J/ly an. early */1/st7 T-e ne(ly .isclose. s/b0oenas (ere sent to Ban) o2 *merica %B*&, =ort/ne :00', &re.it ,/isse %&,', ,ociete +enerale %,&+4=', #oyal Ban) o2 &ana.a %#"', #aboban), orinc-/)in Ban), 4loy.s Ban)in1 +ro/0 P4& %44>T=', Ban) o2 To)yo Mits/bis-i ;=J an. !est4B7 * s0o)esman 2or ;7$7@base. 4loy.s sai. in a statement t-at t-e ban) (as Aassistin1 3ario/s re1/lators in t-eir on1oin1 in3esti1ations7 *n. a s0o)esman 2or !est4B, no( )no(n as Porti1on, sai. t-e 2irm Acontin/eBsC as al(ays to -el0 t-e re1/lators in any enD/iries t-ey may -a3e7A

#oyal Ban) o2 &ana.a s0o)es(oman #ina &ortese sai. #B& -a. A.etermine. t-at o/r 4ibor s/bmissions re2lecte. o/r cost o2 2/n.s,A meanin1 t-e ban) .i. not attem0t to mani0/late t-e rate7 T-e ot-er ban)s eit-er .ecline. to comment or .i. not imme.iately res0on. to reD/ests 2or comment7

7"7 co/nty alle1es 4ibor 2ra/. ,c-nei.erman is lea.in1 t-e in3esti1ation alon1 (it- &onnectic/t state *ttorney +eneral +eor1e Je0sen7 T-e t(o -a3e also been in contact (it- a n/mber o2 t-eir co/nter0arts in ot-er states7 AT-e in3esti1ation can no( be .escribe. as a lar1e, (ell coor.inate. m/ltistate in3esti1ation t-at incl/.es *ttorneys +eneral t-ro/1-o/t t-e ;7,7,A Jaclyn =al)o(s)i, a s0o)es(oman 2or Je0sen, sai. in a statement7 A* 0rimary 2oc/s o2 t-e m/ltistate's BsicC in3esti1ation is to i.enti2y (-et-er state an. m/nici0al iss/ers (it- 2inancial instr/ments 0e11e. to 4ibor an. ot-er benc-mar) interest rates -a3e been -arme. by t-e alle1e. con./ct an., i2 so, to see) reco3ery o2 t-ose ta<0ayer 2/n.s7A T-e Baltimore city 1o3ernment is alrea.y t-e lea. 0lainti22 in a class@action s/it a1ainst Barclays an. ot-er ban)s alle1in1 t-at t-e city lost money ./e to 4ibor mani0/lation7 T-e com0troller o2 assa/ &o/nty in e( "or) -as claime. t-e alle1e. 2ra/. mi1-t -a3e cost -is co/nty as m/c- as 819 million on .eals relate. to 8600 million o2 o/tstan.in1 bon.s7 =e.eral a/t-orities are also in3esti1atin1 t-e matter, as are some o22icials o3erseas7 *ll tol., analysts belie3e t-e ban)s im0licate. in t-e scan.al (ill rac) /0 billions in losses 2rom 0en.in1 liti1ation an. re1/latory 0enalties7

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