Bank Of America, Citigroup Among 5 Banks In International Libor Manipulation Probe: Source
If you were paying attention during 2008, you possess no question that Libor was rigged. A ritualistic morning farce. The truth is no one trusted anyone.
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(Reuters) - Regulators probing alleged manipulation of Libor rates, the benchmark for interbank borrowing costs, have been focusing on five lenders, a person familiar with the matter said on Thursday.
Bank of America, Citigroup, Barclays, WestLB and UBS are being investigated by regulators in the United States, Britain and Japan, the source said, who asked not to be named.
Libor is calculated by banks contributing the rate at which they expect term funding to be offered between prime banks at 1100 GMT. Sixteen banks contributed to the dollar rate in 2008, and the lowest and highest four contributions are discarded and the remaining rates averaged.
Libor rates spiked during the financial crisis but were criticized at the time for not reflecting true market prices. In December 2008 the BBA said it would enhance governance and scrutiny procedures on the data, and earlier this year four more banks were added to contribute to the dollar rate.
Mar 18, 2011 at 2:20 AM
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Kissel declined to comment for this article, and the Journal did not respond to an email requesting comment. Goldman Sachs did not return a call requesting comment.