US, EU major banks probed as part of rate fixing scandal

Conspiracy in the financial world is common in Hollywood films. But now officials in the US, Canada, Europe and Asia are investigating whether the world’s major banks conspired to manipulate interbank rates at the height of the global crisis.

Separate cases have been opened by regulators in Japan, Canada, Switzerland, the USA, and the UK. A group of leading financial institutions including America’s JPMorgan and Citigroup, Germany’s Deutsche Bank, Swiss UBS and Credit Suisse and British HSBC are suspected of conspiring to make artificially high or low submissions for the Libor rate.

Libor is the average interest rate, charged by leading banks in London when lending to other banks. Libor is generated through a daily survey of 16 prime banks and calculated for 10 currencies, including dollars, euros, yen and Swiss francs.

Fluctuations in the Libor rates affect prices of many financial instruments, such as corporate loans, inflation swaps, mortgages and currencies.    Full Read