The National Credit Union Administration (NCUA) is the
latest regulatory body to pursue sanctions against some of the world's largest
financial institutions for
allegedly manipulating LIBOR, a.k.a. the London Interbank Offered Rate.
LIBOR is a commonly used benchmark interest rate used to price trillions
of dollars of financial products, ranging from credit cards and mortgages sold
to the public to complicated bespoke derivative securities sold from one
financial institution to another.
The NCUA is alleging that its member credit unions lost
investment income as a result of the interest rate manipulations. The
lawsuit, National Credit Union Administration Board v. Credit Suisse Group AG,
names some of the world's largest banks, including JPMorgan Chase & Co,
Barclays Plc, Societe General SA, and the Royal Bank of Canada. This suit
is the latest action in a fusillade of litigation and regulatory actions taken
against the banks, which
has drawn mixed results thus far. Over the summer, Barclays, UBS, and
RBS settled with U.S. and European regulators, agreeing to pay fines exceeding
$2.5 billion. But a series of earlier lawsuits, many of which brought
claims under U.S. racketeering statutes, were dismissed this past Spring.
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