Libor Scandal Could Turn ‘Ugly’ As U.S. Cities Begin To Sue
By Mark Gongloff
The news on Wednesday that cities and states are suing some of the world’s largest banks over Libor manipulation shows how this scandal could blow up into one of history’s biggest bank frauds.
That’s because interest-rate manipulation might well have kept your town or state from hiring firefighters or teachers, from paving roads or paying for indigent care or after-school programs for your kids — adding to the human suffering of the economic collapse these same banks caused in the first place.
If it’s any consolation, the lawsuits and fines over this manipulation could potentially cost the banks — which include not only Barclays but Bank of America, JPMorgan Chase, Citigroup, and many more — billions of dollars.
“This could get very ugly in a hurry for some banks,” Peter Tchir of TF Market Advisors wrote in a note.
And this could finally be enough to make Americans stop reacting to the Libor scandal with “a shrug,” as Joe Nocera recently put it, and push them closer to believing what Robert Shapiro, founder of economic advisory firm Sonecon, calls possibly “the biggest financial fraud in history.”