DSNews reports that five Alabama homeowners are acting as lead plaintiffs in a Libor class action. They owned ARMs linked to the Libor and claim to have been damaged in the $1,000 range. The plaintiffs attorneys estimate the class could grow to over 100,000. (DSN) Also see an FT article on the same topic. (FT)…
The latest liability estimate for the Libor scandal is in at $6 billion for municipal bonds, writes Darrell Preston of Bloomberg. (Bloomberg) The estimate comes from Swap Financial Group. The size of the muni swap market is estimated to be about $500 billion, so the $6 billion estimate comes in at 1.2 percent.
The indefatigable Floyd Norris, writing in The New York Times, outlines the problems with fixing Libor as it exists today. The article can be found here. While there can be no doubt that the world needs a no-risk reference rate, I doubt that Libor can be salvaged.
Reuters reports that a second wave of Libor litigation could be heading our way depending on how the rate is changed. You can get the article here. If you don’t feel like making the jump, here’s what you need to know: Major changes to the way Libor is set could trigger years of legal wrangling…
Azam Ahmed of The New York Times has an great piece out in the DealBook Section about how white collar law firms are thriving, especially off of the Libor scandal. You can find the article here. The (literal) money quote: The global investigation into the manipulation of a crucial benchmark interest rate known as the London…
Joshua Gallu of Bloomberg reports here that many of the worlds benchmarks could be subject to the same type of manipulation seen with LIBOR. How?: Fewer than half of the benchmark interest rates surveyed in the U.S., Europe and Asia were based on actual transactions, according to a confidential International Organization of Securities Commissions discussion…
The Guardian has an article which estimates LIBOR-based swaps to be $250 trillion – which is a lot of illions. You can find the article here. Writer Alix Bailin does a nice job describing the LIBOR setting process, which is remarkably like the Keynesian beauty contest. Here you go: The process for ascertaining Libor is…
Here’s the link to the CNBC video. Madame Cowell thinks the LIBOR settlement could be bigger than the mortgage settlements.
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