North Carolina Treasurer Janet Cowell recently said that settlements following the Libor scandal could be comparable to the $26 billion foreclosure settlement between 49 states’ attorneys general and America’s five largest mortgage lenders.
Ally Financial, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo agreed to the settlement deal following allegations that banks took illegal shortcuts in foreclosure cases, CNN Money reports.
Barclays agreed in June to pay out $453 million in a settlement with British and U.S. authorities for its participation in the scandal involving manipulation of Libor, a key benchmark interest rate used to price trillions of dollars of financial products. Some industry experts expect similar settlements to follow in the coming months, according to Reuters.
“We think this could be as big as the mortgage crisis settlement, that this could be a really high impact situation and that we should be aggressive on this,” Cowell said, Equities.com reports.
Plaintiffs in the lawsuits against alleged rate-rigging banks, however, may have difficulty calculating the losses incurred as a result of Libor manipulation.
Barclays admitted in 2008 that it had been submitting artificially low rates in order to lower Libor, thereby deflecting concerns about the bank’s health and “sweeten[ing] particular financial deals,” according to The New York Times.