US Banking Watchdog Sues 16 Banks for Libor Manipulation

US financial watchdog that supervises banking institutes has filed a legal complaint against some of the world's largest banks. The FDIC has filed a ruling in the courts against 16 global players for rigging Libor Libor Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Libor stands for London Inter-bank offered rate. It is an industry-specific term which most of us would never have heard of until the "Libor scandal" became popularized in 2012. Libor is considered to be one of the most important interest rates in finance, upon which trillions of financial contracts rest. The Libor rate effects over $800,000,000,000,000 in financial deals. Banks simply cannot lend money to one another whenever they like as there is a system in place. Every day a group of leading Read this Term rates.

The move comes on the back of investigations which saw American banks take the heat of market manipulation, with some going into recievership. Papers filed in the New York District court highlight 38 banks that have suffered on the back of interbank price rigging.

The Libor scandal has brought shame to global institutes with several bankers involved facing severe penalties.

In the latest filing the FDIC named and shamed: Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank AG, HSBC Holdings, JPMorgan Chase, the Royal Bank of Scotland Group and UBS.

Libor is used by banks to assess rates at which lending is done between institutions overnight. US banks use Libor to benchmark loans and mortgages hence the FDIC's concerns.

The latest dilemma hitting the FX markets is believed to be as serious, if not more than the the Libor scandal, the UK's central bank governor spoke about the seriousness to MPs earlier in the week.