Lloyd Banking Group Likely to Pay Billions on Libbor-rigging

The Lloyds Banking Group may need to pay a total of AUS$2.27 billion because of its involvement in the Libbor-rigging, according to an analyst.

In a statement released to clients, broker firm Liberum Capital said that that investors need to look into the issue properly as the reaction in the market regarding Lloyd’s involvement in the manipulation of Libor’s borrowing rates, has been described as “too sanguine.”

Other than the Lloyds Banking Group, Barclays and the Royal Bank of Scotland are also embroiled in the controversy, along with 16 other financial institutions.

Barclay has, in fact, admitted they were indeed liable and the company is willing to pay millions in fees and damages to the US and British Justice Departments, which have initiated legal action against those involved.

The Lloyds Banking Group’s involvement may seem smaller compared to Barclay though, but analysts warn that the liabilities could extend way beyond each bank’s customers.

Analysts also say that the cost of settlements happening across the world could run up to hundred billion dollars. It may also affect interest rate swaps.

Canada, Singapore, Japan and Europe are also doing separate investigations. But it’s still unknown how fast an agreement will be reached. Investors have actually been pushing for an “industry-wide settlement” so that this is done and over with.

The basis of the lawsuits is the US anti-trust rules.