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Banks Face Lawsuits Worth Billions Over Libor Scam


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http://www.independent.co.uk/news/business/news/banks-face-lawsuits-worth-billions-over-libor-scam-7902918.html

The interest-rate fixing scandal could leave British banks exposed to multi-billion-pound civil actions, experts have warned.

City insiders have raised the prospect of "BP-style" mass litigation against Barclays and other banks implicated in the Libor scam. BP was forced to set aside $20bn (£12.6bn) to just to cover civil compensation claims resulting from the 2010 Gulf of Mexico oil disaster, and still faces a raft of civil litigation.

Some lawsuits have already started in the US, including one filed by US broker Charles Schwab against a number of banks including Barclays, HSBC, Lloyds and RBS.

Fears that Britain's leading banks will face a wave of costly actions were highlighted in a memo from analysts at investment bank Morgan Stanley (MS) following a meeting with Barclays' embattled chief executive Bob Diamond on Thursday.

As I expected this is going to turn into a litigation blood bath. I wonder how US regulators will protect the big US banks? Will they sign deals where the evidence can't be used against them?

Has Martin Lewis started drafting letters for this yet?

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City insiders have raised the prospect of "BP-style" mass litigation against Barclays and other banks implicated in the Libor scam. BP was forced to set aside $20bn (£12.6bn) to just to cover civil compensation claims resulting from the 2010 Gulf of Mexico oil disaster, and still faces a raft of civil litigation.

The BP was nothing more than the raping of British pension funds by greedy US citizens.

20bn damage was not done, and BP wasn't responsible, the 100% American rig owners and operators were responsible. (BP is also America based, but with a lot of British shareholders.)

BP just took the blame as US big oil didn't want it's reputation tarnished.

The US justice system with corrupt judges was abused to steal $20bn, mostly from British pension funds.

There will be initial suggestions that Barclays will be sued, but Judges will bury the cases when US banks start looking culpable, as if Barlcays lost it would set a precedent.

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The BP was nothing more than the raping of British pension funds by greedy US citizens.

20bn damage was not done, and BP wasn't responsible, the 100% American rig owners and operators were responsible. (BP is also America based, but with a lot of British shareholders.)

BP just took the blame as US big oil didn't want it's reputation tarnished.

The US justice system with corrupt judges was abused to steal $20bn, mostly from British pension funds.

There will be initial suggestions that Barclays will be sued, but Judges will bury the cases when US banks start looking culpable, as if Barlcays lost it would set a precedent.

London Inter Bank....British Bankers Association.

Which US banks?

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London Inter Bank....British Bankers Association.

Which US banks?

http://www.bbalibor.com/panels/gbp

Please find a complete list below for all the 16 banks that currently contribute to the fixing of Sterling bbalibor. This panel was last reviewed in May 2012.

Abbey National plc

Bank of Tokyo-Mitsubishi UFJ Ltd

Barclays Bank plc

BNP Paribas

Citibank NA

Credit Agricole CIB

Deutsche Bank AG

HSBC

JP Morgan Chase

Lloyds Banking Group

Mizuho Corporate Bank

Rabobank

Royal Bank of Canada

The Royal Bank of Scotland Group

Société Générale

UBS AG

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http://www.bbalibor.com/panels/gbp

Please find a complete list below for all the 16 banks that currently contribute to the fixing of Sterling bbalibor. This panel was last reviewed in May 2012.

Abbey National plc

Bank of Tokyo-Mitsubishi UFJ Ltd

Barclays Bank plc

BNP Paribas

Citibank NA

Credit Agricole CIB

Deutsche Bank AG

HSBC

JP Morgan Chase

Lloyds Banking Group

Mizuho Corporate Bank

Rabobank

Royal Bank of Canada

The Royal Bank of Scotland Group

Société Générale

UBS AG

what...no Goldman?

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There will be initial suggestions that Barclays will be sued, but Judges will bury the cases when US banks start looking culpable, as if Barlcays lost it would set a precedent.

Nope. They'll all be sued. The DoJ has no love whatsoever for JP Morgan or Citi.

And then there's the EU. Again, no love whatsoever for Anglo-Saxon swiller culture. They're going to get hosed.

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http://www.bbalibor.com/panels/gbp

Please find a complete list below for all the 16 banks that currently contribute to the fixing of Sterling bbalibor. This panel was last reviewed in May 2012.

Abbey National plc

Bank of Tokyo-Mitsubishi UFJ Ltd

Barclays Bank plc

BNP Paribas

Citibank NA

Credit Agricole CIB

Deutsche Bank AG

HSBC

JP Morgan Chase

Lloyds Banking Group

Mizuho Corporate Bank

Rabobank

Royal Bank of Canada

The Royal Bank of Scotland Group

Société Générale

UBS AG

Right. Who'd on for invading France?

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Nope. They'll all be sued. The DoJ has no love whatsoever for JP Morgan or Citi.

And then there's the EU. Again, no love whatsoever for Anglo-Saxon swiller culture. They're going to get hosed.

Could have been worse. Spitzer could still have been AG in New York. Woulda love to have seen that.

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Big fine for one bank, possibly others coming, talk of lawsuits being threatened, possibility fraud squad might go in....

I'm hoping some of this might kick Libor back up off the measly 1% band its been long hovering around. Something back toward 2007-2008 Libor.

Actually it's below 1% and been falling since January.

http://www.thisismoney.co.uk/money/markets/article-1645325/LIBOR-Latest-inter-bank-lending-rate-charts.html

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http://www.independent.co.uk/news/business/news/banks-face-lawsuits-worth-billions-over-libor-scam-7902918.html

As I expected this is going to turn into a litigation blood bath. I wonder how US regulators will protect the big US banks? Will they sign deals where the evidence can't be used against them?

Has Martin Lewis started drafting letters for this yet?

Is this the end game for some of these banks operating an untenable business model? They remind me of British Leyland in the 70's...high wages...no customer service...bad products and subsidised by us...

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http://www.bbalibor.com/panels/gbp

Please find a complete list below for all the 16 banks that currently contribute to the fixing of Sterling bbalibor. This panel was last reviewed in May 2012.

Abbey National plc

Bank of Tokyo-Mitsubishi UFJ Ltd

Barclays Bank plc

BNP Paribas

Citibank NA

Credit Agricole CIB

Deutsche Bank AG

HSBC

JP Morgan Chase

Lloyds Banking Group

Mizuho Corporate Bank

Rabobank

Royal Bank of Canada

The Royal Bank of Scotland Group

Société Générale

UBS AG

And note that there are LIBOR rates for 9 other currencies too - it would be reasonable to assume that these may also have been manipulated bring a load more banks into the fray.

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http://www.independent.co.uk/news/business/news/banks-face-lawsuits-worth-billions-over-libor-scam-7902918.html

As I expected this is going to turn into a litigation blood bath. I wonder how US regulators will protect the big US banks? Will they sign deals where the evidence can't be used against them?

Has Martin Lewis started drafting letters for this yet?

AISI the big problem with actions of this kind is that the person who gets to pay the bill is the shareholders (and for those of us with private pensions, that's you and me), not the bastards who walked off with the bonuses.

tim

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AISI the big problem with actions of this kind is that the person who gets to pay the bill is the shareholders (and for those of us with private pensions, that's you and me), not the bastards who walked off with the bonuses.

tim

Public Companies are run to generate excess bonuses from illusory profits not for shareholders and certainly not customers.

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  • 2 weeks later...

http://www.zerohedge.com/news/world-liebor-and-worst-case-lawsuits

Affected Party Lawsuit

The bigger class of potential lawsuits will be for all those investors who had LIBOR based products but no relationship with the “lying” bank or banks. Let’s say that 1 bank can be proven to have submitted a rate that is 25 bps too low on particular day. Then using that, and comparing to the other bank submissions, it is determined that the “lie” impacted LIBOR by 2 basis points on that day.

Can everyone who was “receiving” LIBOR and had that day as a reset make a claim for those 2 bps? That is the key. If anyone who had LIBOR resetting that day can make a claim on the “lying” bank the number can get large quickly. If it only happened on one day, maybe it would only affect $1 trillion of contracts? 1 bp on 3 month LIBOR on $1 trillion would “only” cost the bank $25 million. The problem is that the more days the bank did it, the bigger the notional affected. If they did it for 90 days in a row, then every single trade referencing 3 month LIBOR would have been affected.

That is a potentially astronomical number. If every single trade that was supposed to get payment based on 3 month LIBOR had a claim on that bank for 1 bp for 1 period, the liability is potentially huge.

That is the real exposure a bank caught “lying” faces. If the lie was big enough and for a long enough period and anyone entitled to receive payment based on LIBOR can make the claim, the potential damage to the bank is enormous. Just 1 basis point on $100 trillion would be $2.5 billion. With with reports showing that there are $800 trillion of contracts that reference LIBOR (what comes after a trillion? Quadrillion?) that 1 bp would $20 billion. If it was more than 1 bp or persisted for more than 90 days, the number would be even bigger. That is without punitive damages.

I don’t have a good grasp on how much the alleged lie was, or how long it allegedly lasted, or what total notional might be impacted, but from what I have seen, the number could be enormous.

ZH getting it's giddy knickers on!

If the rigging as been going on since it's inception I wonder what the trading value is for all of those contracts?

Perhaps the payouts can fund council pensions and old age care?

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