Economist and financial analysts are predicting that as the scale of the potential fraud becomes clear, the fines and litigation that engulfs the banking sector could dwarf the penalty handed to Barclay’s and even herald further, more stringent regulation on Wall Street and multinational banks.
Traders work on the floor of the New York Stock Exchange in New York: It is alleged that the level of interest rate manipulation by the world’s largest banks could have fraudulently affected billions of people across the world
As the investigation into the LIBOR interest rate-rigging in the United Kingdom becomes a financial scandal of tsunami-like proportions, some analysts are openly wondering whether 16 of the world’s largest banks have perpetrated the biggest fraud in history.
With the public coming round to the global significance of banks potentially colluding like a cartel to favourably set the LIBOR, those same analysts predict lawsuits worth tens of billions being brought against the Western world’s largest financial institutions by average consumers.
Early analysis suggests that for a period of several years before and after the 2008 financial crisis, the London interbank offered rate (LIBOR) was manipulated to such an extent that a family with a $100,000 mortgage would have been $50 to $100 worse off a month because of the fixing.
As the fallout from Barclay’s $453 million fine for admitting influencing the LIBOR hits the U.S., Europe and Japan, banks such as Citigroup, JPMorgan Chase, HSBC and Deutsche Bank have admitted they are now under investigation for interest rate manipulation.
Economist and financial analysts are predicting that as the scale of the potential fraud becomes clear, the fines and litigation that engulfs the banking sector could dwarf the penalty handed to Barclay’s and even herald further, more stringent regulation on Wall Street and multinational banks.
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