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Banks Could Owe $35B Over Alleged LIBOR Rate Rigging: Report

Monday, July 23, 2012

Barclays Bank Fined Over Libor Investigations (Oli Scarff/Getty Images)

Banks from around the globe could be on the hook for $35 billion over their alleged role in rigging the interbank lending rate known as LIBOR.

In a recent report, analysts at the brokerage Keefe, Bruyette and Woods estimated that U.S. banks could be liable for many of those billions—not necessarily from fines, but possible civil actions. They include:

  • JPMorgan: $4.8 billion 
  • Bank of America: $4.2 billion
  • Citi: $3.1 billion

According to another report from the brokerage, European banks could also have to fork over billions in settlements over alleged false LIBOR submissions, including:

  • Barclays:$4.8 billion
  • Deutsche Bank: $5.3 billion
  • RBS: $4.7 billion

The analysts stressed that the payout amounts are researched but do involve some guesswork, noting that it is difficult to predict settlement amounts and the burden of proof for plaintiffs will be high. "We claim no legal expertise and acknowledge that estimates are necessarily speculative," the analysts wrote.

If settlements reach $35 billion, they would surpass the $25 billion banks agreed to pay in February to settle claims over improperly speeding through foreclosures.

Treasury Secretary Timothy Geithner will testify before Congress Wednesday and Thursday. He's expected to be asked about the LIBOR scandal and the role of the New York Federal Reserve — the organization he used to run — in diagnosing and publicizing the problem.

According to Reuters, U.S. prosecutors and European regulators are close to charging the traders who manipulated LIBOR.

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Comments [2]

A. Kaye from SLC, Utah

Hey Daniel, our team created an infographic about the Barclays LIBOR rigging scandal. Take a look, and if you like it, please share it for your readers and spread the word. http://tinyurl.com/con9mkj

Jul. 24 2012 12:51 PM
tim from Newark, NJ

We would rather see arrests & convictions. It's one of the failings of our system that unlawful acts by individuals result in arrests and convictions yet unlawful acts by individuals in corporations are not. Corporations don't break the law, people do.

I also think that the money a corporation is fined should go to the victims...we the people who paid higher rates.

Jul. 23 2012 07:18 PM

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