National News
Citibank Fined $100 Million for Interest Rate Manipulation
The interest rates are not only tied to rates within Citibank but interest rates worldwide.
Citibank reached a settlement with 42 states to pay a $100 million fine after an investigation for manipulation of LIBOR, a benchmark interest rate that helps set lending rates around the world.
New York Attorney General Barbara D. Underwood announced the settlement with Citibank on Friday. “Our office has zero tolerance for fraudulent or manipulative conduct that undermines our financial markets,” Attorney General Underwood said in a press statement. “Financial institutions have a basic responsibility to play by the rules – and we will continue to hold those accountable who don’t.”
The investigation was conducted by a group of 42 state Attorneys General offices, and the settlement contains details of communication exchanged between Citibank employees as they obscured or misreported what they were paying for interbank loans. This mainly occurred in 2008 and 2009.
LIBOR, or the London Interbank Offered Rate, has been considered to be the most important interest rate in the world as it has a major impact on everyday borrowers, with rates on loans such as mortgages tied to LIBOR.
This is the third bank that settled with state attorneys general for illegally influencing LIBOR, the other two being Barclays and Deutsche Bank. Collectively, the three banks have been fined $420 million.
Citibank has agreed to comply with ongoing investigations in other banks’ LIBOR cases.
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