A string of major banks have been accused of rigging the Libor benchmark again, five years on from a major scandal.
A class action has been filed in the US against banks such as the Royal Bank of Scotland, Barclays, Lloyds Banking Group, HSBC, UBS, Bank of America, Citi and Deutsche Bank.
The action, which is being led by a Connecticut-based bank, also targets New York Stock Exchange-owner Intercontinental Exchange (Ice), which took over the running of Libor from the British Bankers’ Association (BBA) in 2014 after it emerged banks were manipulating the benchmark to help their own trading positions.
The claim accuses the bank’s of setting artificially low rates “to the detriment of investors in financial instruments,” the Sunday Telegraph reports.
It said the banks “corrupted” the process of setting the Libor rate by submitting lower rates to Ice, allegedly saving themselves hundreds of millions of dollars in the process.
According to the claim: “Defendants combined and conspired to depress – and actually did depress – Ice Libor submissions,” adding: “Every basis point movement in Ice Libor downward would save [the banks] more than $100m (£77.5m) in payments”.
The Libor – or London interbank offered rate – is a benchmark rate which is set daily for five major currencies and for seven different borrowing periods, ranging from overnight loans to 12 months.
It is used to underpin numerous financial contracts worth hundreds of trillions of dollars, however, its veracity was questioned after it emerged that banks had been attempting to manipulate the rate.
Institutions such as Barclays, Deutsche Bank and UBS were fined over rate-rigging while bankers, including former Citi trader Tom Hayes, were jailed.
UBS, Ice, Deutsche Bank and Lloyds declined to comment.
Barclays, RBS, Citi and Bank of America were approached for comment.