LIBOR Scandal Heats Up
NEW YORK (TheStreet) -- JPMorgan Chase
The lawsuits were first reported in the Wall Street Journal. A Fannie Mae spokesperson confirmed the lawsuits had been filed but no other detail was included in the report.
Fannie Mae has not put out a press release discussing the lawsuits, and an email requesting additional comment from the company Friday morning wasn't immediately returned.
Other banks being sued by Fannie Mae, according to the Journal, include Bank of America
Fannie Mae and its sister government sponsored enterprise (GSE) Freddie Mac
Freddie preceded Fannie in filing a LIBOR lawsuit against over a dozen banks in March.
LIBOR stands for London Interbank Offered Rate. The rate was originally compiled by the British Bankers' Association from the rate information submitted each day by a group of large banks with international business. LIBOR is a critically important "overnight rate," because many types of loans have their rates indexed to LIBOR, as do many types of derivative securities.
The LIBOR scandal came to light last year, when various media outlets reported that banks had submitted false information used to compile LIBOR. Banks had misstated the rate at which they estimated they could borrow funds overnight from other banks, because admitting to an increased cost for overnight loans would signal that the financial health of the bank submitting the data was weakening.