NEW YORK: The US Federal Deposit Insurance Corporation (FDIC) sued HSBC, Citigroup, Deutsche Bank and 12 other global banking heavyweights on Friday for manipulating the London Interbank Offered Rate (Libor) benchmark interest rate. The manipulation caused substantial losses to 38 US banks that were shut down due to insolvency during and after the 2008 financial crisis, according to the FDIC. The regulator said the accused institutions cheated the closed banks in US dollar-based Libor swaps and other agreements through the manipulation of the rate between 2007 and 2011. Libor is used as a reference for some $350 trillion worth of financial contracts worldwide, from corporate loans to financial swap contracts. “The panel bank defendants fraudulently and collusively suppressed USD Libor, and they did so to their advantage,” the FDIC’s filing said.
Published in The Express Tribune, March 16th, 2015.
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