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Regulators Investigate Whether Banks Formed Cartel To Manipulate Interest Rates

Banks Interest

First Posted: 04/14/11 09:54 AM ET Updated: 06/14/11 06:12 AM ET

U.S. regulators are probing whether some major banks colluded to manipulate a global benchmark interest rate before and during the financial crisis, the Wall Street Journal reported, citing people familiar with the situation.

In March, Reuters reported that regulators are probing whether a handful of major banks manipulated the global benchmark interest rate -- known as Libor -- to tart up their credit quality, citing a person familiar with the matter.

The Journal said the investigators are now looking into whether the banks formed a global cartel and coordinated how to report borrowing costs between 2006 and 2008.

U.S. regulators are focusing on Bank of America, Citigroup and UBS, among others, and have sent subpoenas to those banks, the WSJ report said. The three banks declined to comment to the Journal.

The Securities and Exchange Commission and the banks could not immediately be reached by Reuters for comment outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Vinu Pilakkott)

Copyright 2011 Thomson Reuters. Click for Restrictions.

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