Two U.S. states probing banks over Libor manipulation

Mon Jul 16, 2012 1:51am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Karen Freifeld

NEW YORK (Reuters) - New York Attorney General Eric Schneiderman has launched a probe into possible manipulation of the Libor benchmark international lending rates by global banks, his spokesman said on Sunday.

Schneiderman, along with Connecticut's Attorney General George Jepsen started the investigation six months ago into the possible rigging of Libor, the London interbank offered rate, New York Attorney General spokesman James Freedland told Reuters.

Libor is compiled from estimates by big banks of how much they believe they have to pay to borrow from each other. It is used for $550 trillion of interest rate derivatives contracts and influences rates on many lending transactions, including mortgages, student loans and credit cards.

"Working together, the New York and Connecticut attorneys general have been looking into these issues for over six months, and will continue to follow the facts wherever they lead," Freedland said.

Jepsen's spokeswoman did not immediately respond to a call and an email for comment.

Barclays Plc, the bank at the center of the Libor scandal, was fined a record $450 million last month by U.S. and British authorities for manipulating the rate, but the deal does not shield Barclays employees from criminal prosecution.

The U.S. Justice Department is also building criminal cases against several financial institutions and their employees related to the manipulation of interest rates, The New York Times reported on Saturday.

The Times said cities, states and municipalities in the United States were trying to determine whether they suffered losses due to rate manipulation and some had filed suit.   Continued...

 
A man walks past a branch of Barclays bank in central London, June 28, 2012. REUTERS/Paul Hackett