LIBOR Crosses the Pond
Finance Partner Les Jacobowitz spoke with Banking New York after attorneys general in at least five states began conducting investigations tied to alleged manipulation of the London interbank offered rate (LIBOR), adding to probes by US and UK authorities.
“This will be one of the largest financial crisis-related issues of the Great Recession confronting large banks due to the dollar magnitude of the issue and LIBOR’s broad use to consumers and companies,” Les told Banking New York. “It is estimated that there are $150 to $300 trillion of dollars of debt tied to LIBOR. These include variable rate mortgages, variable rate notes/bonds, commercial lines of credit and commercial loans. The magnitude of the settlement by Barclays illustrates that this scandal will dramatically affect other implicated banks due to the impact such settlements have on fostering costly litigation against such banks.”
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