October 15, 2012
U.S. homeowners filed a lawsuit against 12 banks, including Barclays Bank Plc and JPMorgan Chase & Co., claiming that manipulation of the benchmark Libor lending rate made their mortgage repayments more expensive.
Traders at banks in Europe and North America such as UBS AG, Bank of America Corp. and Royal Bank of Scotland Group Plc, “unjustly enriched themselves” by manipulating the rate, according to the complaint. That allowed them to increase the payments by homeowners on adjustable rate loans, boosting profit, according to the lawsuit.
Libor, or the London interbank offered rate, is the benchmark for more than $300 trillion of securities and loans. The rate is calculated from a daily poll carried out by Thomson Reuters Corp. on behalf of the British Bankers’ Association, a London-based lobby group. Lenders are asked to estimate how much it would cost to borrow from each other for different periods and in different currencies.