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article imageU.S. FDIC sues major banks over Libor manipulation

By AFP     Mar 14, 2014 in Business

The US Federal Deposit Insurance Corporation sued HSBC, Citigroup, Deutsche Bank and 12 other global banking heavyweights on Friday for manipulation of the Libor benchmark interest rate.

The regulator said the manipulation caused "substantial losses" to 38 US banks which were shut down due to insolvency during and after the 2008 financial crisis.

The FDIC said the accused institutions cheated the closed banks in US dollar Libor-based swap and other agreements through the manipulation of the rate between 2007 and 2011.

"The Panel Bank Defendants fraudulently and collusively suppressed USD Libor, and they did so to their advantage," the suit said.

It also cited the British Bankers' Association, which oversaw the fixing of Libor at the time.

"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 said.

The FDIC said it was seeking full damages for losses incurred by the closed banks, punitive damages, and damages for violating US antitrust statutes.

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