US regulator sues major banks over Libor manipulation

Two men use ATM machines at an HSBC branch in Hong Kong on March 4, 2013The US Federal Deposit Insurance Corporation sued HSBC, Citigroup, Deutsche Bank and 12 other global banking heavyweights for manipulating the 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. Libor, or the London Interbank Offered Rate, 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.

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