World Bulletin / News Desk
New York Attorney General Eric Schneiderman has launched a probe into possible manipulation of the Libor benchmark international lending rates by global banks, his spokesman said on Sunday.
Schneiderman, along with Connecticut's Attorney General George Jepsen started the investigation six months ago into the possible rigging of Libor, the London interbank offered rate, New York Attorney General spokesman James Freedland told Reuters.
Libor is compiled from estimates by big banks of how much they believe they have to pay to borrow from each other. It is used for $550 trillion of interest rate derivatives contracts and influences rates on many lending transactions, including mortgages, student loans and credit cards.
"Working together, the New York and Connecticut attorneys general have been looking into these issues for over six months, and will continue to follow the facts wherever they lead," Freedland said.
Jepsen's spokeswoman did not immediately respond to a call and an email for comment.
Barclays Plc, the bank at the center of the Libor scandal, was fined a record $450 million last month by U.S. and British authorities for manipulating the rate, but the deal does not shield Barclays employees from criminal prosecution.
The U.S. Justice Department is also building criminal cases against several financial institutions and their employees related to the manipulation of interest rates, The New York Times reported on Saturday.
The Times said cities, states and municipalities in the United States were trying to determine whether they suffered loses due to rate manipulation and some had filed suit.
Given the broad scope of the Libor case and the number of institutions thought to be involved, the investigations could provide authorities with a "signature moment" to hold big banks accountable for misdeeds during the financial crisis, which hit global markets from late 2007, the newspaper said.
The investigation is unusually complex, could continue for years and end in settlements rather than indictments, the Times said, citing officials close to the case.
Separately, Bloomberg reported that Barclays traders involved in allegedly manipulating Libor rates between 2005 and 2007 could face possible U.S. charges before the Labor Day holiday in September. The agency had cited a person familiar with the Justice Department investigation.
A spokeswoman for the Justice Department declined to comment to Bloomberg. Both Justice department and Barclays could not immediately be reached for comment by Reuters outside regular U.S. and UK business hours.
States jump in
The New York Attorney General has powerful tools in his legal arsenal including the state securities fraud statute known as the Martin Act. That law allows authorities to establish financial fraud without proving intent to defraud. The AG can bring both civil and criminal cases.
States can also make the case that rate rigging harmed state finances by lowering returns on financial contracts with banks, such as interest rate swaps which help small governments manage the cost of their debt. If Libor is artificially lowered, the state receives smaller payments.
Barclays will pull out of the rate-setting panel for interbank lending in the United Arab Emirates because of its involvement in the Libor scandal in that country, industry sources told Reuters on Sunday.
Overnight lending rate gets cut by 25 points to 8.50 percent; overnight borrowing rate remains unchanged at 7.25 percent
"It appears that a programme of public spending in Germany would not be the most appropriate tool to help give a strong stimulus to the international economy," the central bank said following a study into the issue.
The 0.3 percent quarterly gain was in line with average forecasts compiled by data company Factset.
Qatari Ambassador to Ankara says bi-lateral trade could double through committment to undertake further investments in Turkey
Radical cleansing will start a new era in Turkey, says the head of the Turkish Cooperation and Development Agency (TIKA)
EU Commissioner for Jobs, Growth and Investment and Competitiveness Jryki Katainen told reporters "we should forget this phrase" when asked if that meant granting market economy status to China.
Militancy has reduced revenue from oil industry by half, senior official says
The grant was signed Monday in Nairobi to mitigate impact of forced displacements on refugee hosting communities in East Africa
The EU Trade Commissioner Malmstrom made the comment while speaking to Chinese students in Beijing ahead of a China-EU summit.
Trade Ministers Meeting in Shanghai concludes with pledge to push efforts toward trade liberalization and facilitation
Brexit raises uncertainty for consumer, investor confidence, ratings agency says
Bank of England Governor Mark Carney eases lending rules after vote for Brexit
Banca Monte dei Paschi di Siena, or BMPS, is among the banks at the forefront of those concerns with gross bad loans amounting to 46.9 billion euros ($52 billion).
Fund to be used in support of education, health, municipal, socio-economic support for refugees in Turkey