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February 1, 2023

UBS, Bank of America, Citigroup searched for manipulating Libor rate

UBS, Bank of America, Citigroup and Barclays have received subpoenas from US regulators probing the setting of the London interbank offered rate, or Libor, for US dollars between 2006 and 2008, Financial Times newspaper informs, quoted by HotNews. Several witnesses have been interviewed by UK and US regulators and criminal investigators. They are examining whether rates were manipulated immediately before and during the financial crisis. At the time, some commentators complained that Libor rates did not reflect the real market. The investigation’s scope has narrowed in recent months.

UBS disclosed on Tuesday that it had been subpoenaed by three US agencies and also received an information request from Japan. The regulatory agencies and other banks involved declined to comment. The BBA sets daily Libor rates for short-term borrowing in 10 currencies over 15 periods – ranging from overnight to 12 months. The association surveys banks about the rates at which they believe they can borrow “in a reasonable market”. The top and bottom quartile of reported rates are dropped, with the average of the remainder used for index purposes. During the financial crisis, the US dollar Libor rate for three-month lending surged to 5.72 per cent in September 2007 and 4.81 per cent in October 2008.

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