WASHINGTON — Fannie Mae filed a lawsuit Thursday against nine major banks alleging the mortgage giant lost hundreds of millions after the banks participated in the rigging of a key global interest rate.
The banks include Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., and others that set the London interbank offered rate, or LIBOR. It is the basis for trillions of dollars in contracts, including mortgages and bonds.
Fannie claims it suffered $800 million in losses from transactions based on the banks’ false submissions of their borrowing costs used to set LIBOR. Four of the banks sued — two British, one Swiss, and one Dutch — have been fined $3.6 billion by U.S. and British regulators for manipulating LIBOR.
Fannie’s smaller sibling, Freddie Mac, filed similar suits against 15 LIBOR-setting banks in March.
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.