US regulator sues 15 banks, including HSBC, for rigging Libor benchmark
FDIC says interest rate manipulation caused 'substantial losses' to 38 now-closed lenders
The US Federal Deposit Insurance Corporation (FDIC) has sued HSBC, Citigroup, Deutsche Bank and 12 other big global banks 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.
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, or the London Interbank Offered Rate, is used as a reference for some US$350 trillion worth of financial contracts worldwide, from corporate loans to financial swap contracts.
The banks named are, or were, participants in setting the daily Libor rate.
They include Bank of America and JPMorgan Chase of the United States, Germany's Deutsche Bank and WestLB, which is no longer in business, Britain's Barclays and Lloyds banks and Royal Bank of Scotland, Japan's Norinchukin Bank and Bank of Tokyo-Mitsubishi, Credit Suisse and UBS of Switzerland, Royal Bank of Canada and Rabobank of the Netherlands.
Several of the banks have already paid substantial fines to regulators and judicial authorities in the United States and Europe for their participating in rate-fixing.
