British bank Lloyds Banking Group was sued today by British investigators for alleged involvement in the Libor scandal.
After the 453 million dollar fine paid by Barclays, more are expected.
Lloyds, the largest British commercial bank, announced in its 2011 annual report that it is a defendant in the Libor case: it will probably have to pay out around £1,5 billion.
The British bank confirmed to Reuters without giving further details: “Some members of the bank have been sued. The authorities have asked them for more information, and our team will cooperate with the authorities."
In a conference call with reporters, Lloyds chief financial officer George Clumber said there would be no need for the bank to set aside funds for legal costs or a trial, further declaring that: "They are still investigating about our work and until the investigation is over, there's no reason to give numbers."
Lloyds has also just published its first 2012 profits, which are beyond expectations: these 700 million will be used to offset a negative sale of consumer insurance - another scandal which has reduced the confidence of the British in their banks, which has cost to the bank about 1 billion pounds this year and 75 billion in total.
Still on the Libor case, England does not seem to be the only country to be involved in the investigation: Gerard Rameix, head of the MFA, said he was ready to cooperate. He told Bloomberg Television: "We can contribute to the ongoing investigation, and we will cooperate fully with the authorities" although the ACP banking regulator has not yet opened an investigation into a probable involvement of French banks in the Libor case.
Traders from Deutsche Bank, HSBC Holdings and Credit Agricole are likely involved with a former Barclays employee. Geitner, former president of the Federal Reserve in New York and current Secretary of the US Treasury, also remains under pressure. The Treasury secretary, who is under pressure for failing to act in time against the manipulation of interbank interest rates, told investigators yesterday that he alerted the right authorities "soon".
During his first chance to defend himself before Congress, he said he has been aware of the "Libor problem" since 2008 when he was chairman of the Federal Reserve.
Documents released by the Fed show that, in August 2007, Barclays warned the Fed about possible problems with low Libor interest rates.
Geithner defended himself by saying: “We, or at least I, have known about the problem since the spring of 2008 and had acted promptly. During that time, we have taken a very close look at the issue and have taken the initiative to bring it to the attention of the largest US entities, including firms that monitor market manipulation and abuse,” including the Community Futures Trading Commission. and The Securities and Exchange Commission.
But the lawyers are not buying it, pointing out that the Fed used Libor as a benchmark in "emergency" loans, such as the AIG loan.
