Mortgage giant Fannie Mae has filed a lawsuit against nine banks for allegedly manipulating the London interbank offered rate (Libor) that is used to set global interest rates on such financial products as mortgages and credit cards.
Several prominent banks have been named, including Credit Suisse, Citibank Bank of America and JPMorgan. The suit alleges that Fannie Mae lost more than $800 million in transactions that were culled from the banks' fraudulent submissions of their borrowing costs to calculate their Libor values.
Much of the lawsuit is based on the admitted guilt of four banks: Barclays, UBS, RBS and Rabobank.
This is not the first time that Libor corruption has become evident. In March, Fannie Mae's subsidiary, Freddie Mac, filed a lawsuit against 15 Libor-granting banks for alleged fraud. Last month, the National Credit Union Association sued 13 banks for alleged Libor manipulation.
Four of the banks alone — including two British, one Dutch and one Swiss — have been fined a combined $3.6 billion by U.S. and British regulators for unauthorized manipulation of the Libor.
• This article is based in part on wire service reports.
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