7 banks subpoenaed in US Libor probe

Seven banks have been subpoenaed in the United States in the investigation into rigging the Libor benchmark interest rate, a source close to the case told AFP Wednesday. New York authorities subpoenaed UBS, Deutsche Bank, Royal Bank of Scotland, JP Morgan, Citigroup, HSBC and Barclays Bank in their probe into fixing the key London-centered interest rate, used as a reference by banks, businesses and private borrowers worldwide, they said. The subpoenas were sent between May and July, according to the source. The authorities have requested documents but have not interviewed any bank officials in the case. New York, Connecticut and other states are looking whether they or any of their citizens incurred losses due to the attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009. The Libor scandal erupted in June when Barclays bank was fined 290 million pounds ($452 million) by British and US regulators trying to artificially skew the rate during the stress of the financial crisis. Barclays was the first bank to be fined as part of a global probe into suspected manipulation of the twin interest rates that are crucial to the operation of short-term financing and global markets. In July US Federal Reserve Chairman Ben Bernanke said that the revelations about how banks had skewed the Libor rate were "very troubling" and undermined confidence in the financial system. "Libor is a critical benchmark to many financial contracts," Bernanke told a panel in Congress. "The actions of traders and banks that have been disclosed are not only very troubling in themselves, but they have the effect of undermining markets."