NEW YORK (AP) — A group of banks including Bank of America and JPMorgan Chase have won dismissal of most of the claims in private lawsuits alleging that they rigged a key interest rate.
U.S. District Judge Naomi Reice Buchwald in New York dismissed antitrust claims brought against the banks by a group of plaintiffs that included the City of Baltimore and some pension funds. The plaintiffs alleged that they had suffered losses because the banks had manipulated the London Interbank Offered Rate, or LIBOR.
The judge said that while the banks had already paid billions of dollars of penalties to government regulatory agencies, private plaintiffs had to satisfy many requirements which governments didn't.
LIBOR is the rate banks use to borrow from each other — and it is critical. The rate indirectly affects the cost of loans that people pay when they take out loans. It provides the basis for trillions of dollars in contracts around the world, including bonds and consumer loans — such as when consumers buy a home or car.
It is a self-policing system and relies on information that global banks submit to a British banking authority.