News Summary: LIBOR may have cost 2 companies $3B

Published on NewsOK Modified: December 19, 2012 at 7:03 pm •  Published: December 19, 2012

BIG LOSSES: Government-controlled Fannie Mae and Freddie Mac may have lost more than $3 billion from big banks' alleged rigging of a key interest rate, a federal watchdog has found.

POSSIBLE LEGAL ACTION: The staff of the inspector general for the Federal Housing Finance Agency, which oversees the two mortgage giants, gave the estimate and recommended that the FHFA consider suing banks over the LIBOR rate. LIBOR, or the London Interbank Offered Rate, is used to price trillions of dollars in contracts including mortgages and credit cards.

BIG FINE FOR BANK: Switzerland's largest bank, UBS, agreed Wednesday to pay $1.5 billion in fines, becoming the second bank fined for trying to manipulate LIBOR. Other big global banks in several countries also are being investigated for rigging the rate and are expected to be fined.


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