The LIBOR scandal isn’t going anywhere. In the literal sense, it isn’t going anywhere because it’s so wide-reaching and involves hundreds of trillions of dollars all over the world. LIBOR, the London Interbank Offered Rate, was purposely manipulated both upward and downward, resulting in obscene ill-gotten profits for many of the banks involved, while many cities and municipalities across the globe were adversely affected. The question of course is whether we will pay attention to it.
The city of Baltimore became one of the first to actually file a lawsuit against the banks earlier this summer, and now a growing number of towns and organizations are also getting in on the act as the implications of what has been happening begin to sink in:
Baltimore is lead plaintiff in a class action lawsuit that alleges that banks including Barclays, Bank of America, HSBC, JP Morgan and UBS conspired to fix a set of key interest rates – the London Interbank Offered Rate, or Libor – costing the city millions in the process. So far, the Libor scandal has played out mostly under the radar in the US. But now it is gaining traction in Washington, and Baltimore’s suit is putting a human face on a scandal legal experts predict could end up being the most costly of the credit crisis.
“It’s an enormous scandal; it eclipses anything we’ve seen since 2008,” said Matt Taibbi, appearing on Democracy Now in July. He calls it “the mother of all regulatory dilemmas….pretty much all of the banks have to be in on it to move the needle [the bank exchange rate] in any one direction.”