Fannie Mae has sued nine big banks for allegedly manipulating a financial benchmark used to set rates on mortgages, credit cards, loans and other financial instruments
Fannie Mae has sued nine big banks for allegedly manipulating a financial benchmark used to set rates on mortgages, credit cards, loans and other financial instruments.
The mortgage finance giant alleges that the banks rigged the London Interbank Offered Rate (Libor) to favor their own trades, according to a USA Today report. Fannie maintains that it lost at least $800 million as a result of Libor manipulation.
“Fannie Mae filed this action to recover losses it suffered as a result of the defendants' manipulation of Libor,” the company said in a statement Thursday. “We have a responsibility to be good stewards of our resources.”
The lawsuit names Bank of America, JPMorgan Chase, Citigroup, UBS, Barclays, Deutsche Bank, Royal Bank of Scotland, Credit Suisse and Rabobank.
The Libor rate set every weekday morning based on what global banks say they would expect to pay for loans from each other, according to USA Today. Lawsuits related to the rate-fixing scandal allege that several banks conspired to influence the rate to favor their own trades.
UBS, Rabobank, Royal Bank of Scotland and Barclays have previously acknowledged their role in the Libor-fixing scandal and agreed to more than $3bn in settlements, according to USA Today.