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Libor scandal


Swiss banks face US Libor lawsuit




Freddie Mac is suing two Swiss banks (Keystone)

Freddie Mac is suing two Swiss banks

(Keystone)

UBS and Credit Suisse are among 15 banks to be hit with a lawsuit by the United States government-owned mortgage finance company Freddie Mac as a result of the Libor manipulation scandal.

UBS was fined $1.5 billion (CHF1.4 billion) by various regulators last year after admitting its role in the global interest rate rigging scam. Credit Suisse is one of many banks also under investigation.

Freddie Mac is suing the banks, plus the British Bankers’ Association that was responsible for overseeing Libor, after it was found that Libor rates were artificially lowered by certain traders to maximise profits.

The London Interbank Offered Rate (Libor) is used as a reference point for mortgages and other trades worth around $300 trillion.

It is estimated that Freddie Mac and its sister company Fannie Mae could have lost up to $3 billion in interest payments as a result of the manipulation.

UBS and Credit Suisse declined to comment on the lawsuit, the latest in a growing list of legal complaints against banks across the globe.

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