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A US regulator has sued 16 banks for allegedly manipulating the London
interbank offered rate (Libor).
The Libor rate is used to set trillions of dollars of financial contracts,
including mortgages and financial transactions around the world.
The regulator said the manipulation caused substantial losses to 38 US banks
which were shut down during and after the 2008 financial crisis.
The sued banks include Barclays, HSBC, Citigroup and Royal Bank of Scotland.
The British Bankers' Association (BBA) has also been sued by the regulator -
the US Federal Deposit Insurance Corporation (FDIC).
"BBA participated in the alleged scheme to protect the revenue stream it
generated from selling Libor licenses and to appease the Panel Bank Defendants
that were members of the BBA," it was quoted as saying by the AFP news agency.
The FDIC alleged that the banks mentioned in its lawsuit rigged the rate from
August 2007 to at least mid-2011.
Other banks named in the lawsuit include Bank of America, JPMorgan Chase,
Deutsche Bank, Lloyds Bank, Credit Suisse, UBS, and Rabobank.
Growing pressure
Libor is the average rate at which banks lend money to one another and is
decided on a daily basis.
Most of the world's biggest banks contribute estimates to form the Libor.
But there have been allegations that some have looked to profit from it by
understating or overstating their submissions.
Over the past two years, regulators across the globe have been investigating
the manipulation of the rate and there have been $3.7bn ( 2.26bn) in fines to
date.
A string of international banks and brokers, including Barclays and the Royal
Bank of Scotland, have faced both criminal and civil penalties for their
involvement in the scandal.
Some banks have also been found to have understated their submissions in the
period during and after the financial crisis.
They did so in order to avoid the perception that they were having to borrow at
higher interest rates than their peers and might therefore be in financial
difficulty.