Libor Rate Fixing - Spotlight Shining on Citigroup and JPMorgan Now
NEW YORK — The harsh light of the Libor rate-fixing scandal has crossed the
Atlantic, with both Citigroup and JPMorgan Chase saying regulators and
investigators have requested information from them in a so-far preliminary probe
of the case.
Share prices for both — as well as Bank of America, which has
not said if it was asked for information — have fallen sharply this week amid
worries they could be in line for the type of heavy fines laid on Britain’s
Barclays Bank, at the center of the scandal.
Barclays has been fined $452
million (360 million euros) by British and US regulators for attempted
manipulation of the markets for Libor and Eurobor benchmark interest rates
between 2005 and 2009.
Three top Barclays executives have resigned and on
Friday Britain’s Serious Fraud Office said it would formally investigate the
case, which has dented London’s reputation as a top financial center.
speculation runs to other banks because the Libor rate is set based on
information from 16 international banks, and many think that manipulating it
would take more than one bank.
The issue affects not just banks but
commercial and retail borrowers around the world — in the United States, the
payments of a floating rate home mortgage loan are often tied to the Libor base
Citi, JPMorgan and Bank of America are three of the 16 banks that fix
the rate, as an average of what they say they pay for funds in London’s
All three have declined to comment on the scandal.
JPMorgan and Citi have said that they had received requests for information from
regulators and were cooperating.
Citigroup noted in its reports that the
Japanese Financial Services Agency, among several regulators involved in the
cross-border investigations, had taken administrative action against its
Citigroup Global Markets Japan unit over “certain communications” made by two
CGMJ traders about Libor and the Euroyen Tokyo interbank rate, or Tibor.
unit was given a two-week suspension from trading in yen-linked derivatives in
JFSA also took administrative action against Citibank Japan in part
related to the handling of the communications made by the CGMJ traders.
inquiries by government agencies into various interbank offered rates are
ongoing,” the bank said in a report to the Securities and Exchange
Citigroup and JPMorgan also acknowledged private civil and
class-action lawsuits filed against the Libor-setting banks beginning in April
over the issue.
The suits have been assembled together into one action
proceeding in the New York federal district court.
Even if there is not yet
any formal investigation of the US banks over the Libor rate manipulation, their
shares have already taken falls over worries they could be involved.
shares were off 5.1 percent for the week in afternoon trade Friday; Citi shares
were down 4.4 percent and Bank of America 6.5 percent.http://12160.info/profiles/blogs/sounds-like-the-shit-is-fixing-to-hit-libor-rate-fixing-scandal?xg_source=activity