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Fingers point as Libor probe grows

Aug. 6, 2012 at 12:52 PM   |   Comments

LONDON, Aug. 6 (UPI) -- U.S. and European bank officials are pointing fingers at each other as an international investigation into manipulation of interest rates gains traction.

While acknowledging their own errors, institutions have been tattling to investigators about others' actions they think are worse than their's, The New York Times reported Monday.

One official told the Times banks are emphasizing, "We're not as bad as the next guy."

Authorities are investigating more than 10 banks for their roles in setting global interest rates, such as the London interbank-offered rate known as Libor, which buttress trillions of dollars of financial products, including mortgages and student loans.

Regulators are looking into whether the financial institutions plotted to shift the rates up or down to gain more profits or shield against losses on their trading positions. Some banks are also being investigated for reporting artificially low rates so they appear financially healthier.

Court documents and employees indicate the Swiss bank USB schemed with traders at Deutsche Bank, HSBC and the Royal Bank of Scotland to manipulate key interest rates by sharing e-mails, messages and other information.

HSBC and Citigroup also are providing its account of the activities, a lawyer briefed on the matter told the Times.

Several banks are using Barclays' recent $450 million settlement with officials as a guide in their preliminary discussions with authorities, the Times said. Officials said JPMorgan Chase and Citigroup both are telling officials that their chief executive officers weren't implicated in wrongdoing -- as in the case of Barclays -- so the banks should be treated less severely.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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