The Federal Deposit Insurance Corporation, a US government agency, has filed a lawsuit against some of the UK’s largest banks over manipulation of Libor, which it argues was skewed against the banks it had to rescue during the financial crisis.
The agency has brought a claim against nine banks, including Barclays, Lloyds Banking Group and RBS, in the High Court, The Times reports.
A figure has not been put on the claim, but 39 defunct banks that the agency rescued during the crisis had been worth more than $440bn with a combined turnover of $114bn at the end of 2007.
The claim has the potential to become the largest Libor-related lawsuit yet.
The failed banks all had a variety of assets that derived their prices from the benchmark at the time of their demise, according to the lawsuit.
The filing cites a 2008 memo from the BBA stating that USD Libor was 20 to 30bps lower than it should have been and lenders might “float the dollar rate slightly, gently, up” via a “co-ordinated action”.
More than $350trn financial products are linked to Libor.