Libor rate rigging scandal: Banks face penalties worth $22 billion

LONDON: Twelve global banks involved in the Libor rate-rigging scandal may face up to a combined $22 billion in penalties and damages, according to Morgan Stanley analysis. The analysis, called ‘crude’ by its authors, assumes that 11 more banks are likely to be penalised, according to media reports in Britain.

Last month, British bank Barclays was fined $456 million by US and UK authorities for trying to rig the London Inter-bank Offer Rate which is the benchmark for the global derivatives, loans and mortgages market. The calculation excludes the potential fallout from ongoing US and European Union cartel investigations, which could result in multibillion-dollar fines.

European Commission cartel investigations can take several years to complete and result in fines of up to 10 per cent of turnover. Under EU law, investigators have to just demonstrate there was an attempt to form a cartel.