Published: Tue, August 09, 2016
Economy | By Melissa Porter

Nevada among 43 states in bank rate settlement with Barclays

Nevada among 43 states in bank rate settlement with Barclays

Barclays Bank PLC reached a settlement with 44 USA states and the District of Columbia in the Libor manipulation lawsuit.

"There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big banks and other financial institutions that engage in fraud or impair the fair functioning of financial markets", Schneiderman was quoted as saying. It is used to establish interest rates on loans worldwide, so it affects municipal financial investments and bonds, adjustable rate loans, mortgages and student loans.

Barclays is the first bank to resolve allegations related to LIBOR manipulation; an investigation into several other banks is continuing. Barclays also believed that other banks' LIBOR submissions likewise did not reflect their true borrowing rates, and that therefore, published LIBOR did not reflect the cost of borrowing funds in the market, as it was supposed to do.

Idaho will receive an estimated $1 million in restitution to settle alleged rate-rigging by Barclays, according to a news release Monday from Attorney General Lawrence Wasden. Other banks that have reached settlements with USA authorities in connection with Libor include UBS (UBSG.S), Royal Bank of Scotland (RBS.L), Deutsche Bank (DBKGn.DE) and ICAP (IAP.L).

Barclays in 2012 pleaded guilty to rate manipulation and agreed to pay $453 million to British and USA authorities.

Luther Strange, attorney general for Alabama, today announced the national settlement involving LIBOR, a common benchmark interest rate that is used to make adjustments for rate mortgages. First, during the financial crisis period of roughly 2007-2009, Barclays' managers frequently told LIBOR submitters to lower their LIBOR settings in order to avoid the appearance that Barclays was in financial difficulty and needed to pay a higher rate than some of its peers to borrow money.

Barclays didn't immediately reply to a request for comment.

They added the rest will cover the costs of investigation and administration.

The deal grew out of an investigation by 44 states, including New Jersey, which found that the Barclays actions harmed the New Jersey Turnpike Authority and other government entities around the nation.

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