Daily Management Review

HSBC To Settle Libor Manipulation Probes With ‘$100 Million’


03/30/2018


HSBC agrees to pay for avoiding risks, distractions and expense and not for any wrongdoing.



HSBC Holdings Plc becomes the “fourth major bank” which has agreed to settle down on accusations made by “private U.S. litigation” on conspiracy of manipulating “the Libor benchmark interest rate” through the payment of “$100 million”.
 
Filings made on Thursday in Manhattan’s “U.S. District Court” disclosed the “preliminary accord” received from the investors who were directly transacting with the banks panel for determining Libor or “the London Interbank Offered Rate”. However, court needs to approve the same.
 
As per Reuters:
“Settlements with the OTC investors total $590 million so far, and include $120 million with Barclays Plc, $130 million with Citigroup Inc and $240 million with Deutsche Bank AG”.
 
While the HSBC claims that it had no involvement in any wrongdoing, the settlement step was only taken to avoid the “risks, costs and distraction of litigation”. No comments were available immediately from the company.
 
Libor is used by banks for determining “rates on hundreds of trillions of dollars of credit card, mortgage, student loan and other transactions” along with determining “costs of borrowing from each other”. 16 banks are facing the accusations of “conspiring to manipulate Libor” made by investors which include “the city of Baltimore and Yale University in Connecticut”. The beginning of “private litigation” dates back to 2011.
 
On a global scale banks have, so far, paid nearly “$9 billion” to settle down against “Libor-rigging probes”. However, Reuters informed that:
“Last July, the head of the U.K. Financial Conduct Authority said that regulator will phase out Libor by the end of 2021, citing a lack of data to underpin it.
“The case is In re: Libor-Based Financial Instruments Antitrust Litigation, U.S. District Court, Southern District of New York, No. 11-md-02262”.
 
 
References:
reuters.com







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