Federal Deposit Insurance Corporation sued 16 world largest banks
The US regulator, Federal Deposit Insurance Corp filed a suit on 16 of the world’s largest banks.
The US regulator, Federal Deposit Insurance Corporation on 14 March 2014 filed a law-suit on 16 of the world’s largest banks. The regulator accused the banks for allegedly manipulating the Libor interest rate.
The Banks that has been sued includes Barclays Plc, HSBC, Citigroup and Royal Bank of Scotland, UBS and British Bankers Association (BBA) and others.
These global banks broke certain swap contracts and separately planed to rig the labor rate to which the contracts were signed. These banks conduct caused substantial looses to 38 other banks including Washington Mutual Bank and IndyMac Bank.
Libor interest rate
• Libor is an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. British Bankers Association fixes the Libor rate on daily basis.
• It is the world's most widely used benchmark for short-term interest rates.
• Libor became keystone for more than 550 trillion dollar in financial products from home loans to derivatives.