"This Is Just The Beginning" As LIBOR-Manipulation Liabilities May Top $176bn

Tyler Durden's picture

Forget the few hundred million dollars in wrist-slap fines the banks face from regulatory discipline over the Libor rate manipulation 'conspiracy fact'. As the WSJ reports this morning, the number of suits and potential liabilities are rising rapidly as cities, insurers, investors, and lenders all jump on the cabal-beating band-wagon. From individual investors claiming lost returns due to low rates to hedge funds squeezed in derivatives trades, liabilities could exceed $176bn as the blood-suckers lawyers note "this is just the beginning" as "scores of interested potential clients" have called. While, obviously, it won't be easy to win in court, the ongoing costs of litigation and potential liability (which will be largely ignored by Messrs. Bove et al. we are sure) range from Macquarie's $176bn estimate to Morgan Stanley's $7.8bn (quite a range) and it will likely take years for the lawsuits to see resolution. Notably though, floating-rate bond-holders are likely to have the most success (and easiest claim) as Darrell Duffie notes "assuming they can convince a jury Libor was too low, it's pretty easy to then show they were paid too little interest" but in the meantime, as CalPERS adds, "we await the regulatory investigations, which will drive the outcome" of litigation.



This potential liability, for some context, is over 35% of the entire market cap of the Big 5 US banks... (~$489.5bn) - though of course, loan loss reserves can be rotated fungibly to litigation loss reserves and any negative implication of any suit will merely lead to positive DVA adjustments - so don't feel too bad for them!!



Chart: WSJ

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Buckaroo Banzai's picture

I'd feel better about these lawsuits if I didn't realize that they are gonna make a bunch of lawyers unbelievably rich.

Omen IV's picture

the "blood sucking lawyers" in lieu of an absentee and paid off government regulators are welcome frontier justice at the Ok Corral.

i hope they kill the pigs for good

BaBaBouy's picture

$200 Billion Cost for Libor Manipulation/Fixing!


Imagine, what will be the Bill for the GOLD and SILVER Manip that has been going on for 25 Years ???

Will every Call Option holder etc. have a claim ???

smlbizman's picture

maybe 49 ag's can get together and punish them with taxpayer money...that should teach them...

oogs66's picture

Lawyers will do well - not sure who else will

Gazooks's picture

ink and paper suppliers

Arnold Ziffel's picture

Without jailtime, nothing changes.

Offthebeach's picture

Time to raise some more "service charges" , good and hard, on the muppets.

LawsofPhysics's picture

This will take years to address.  WWIII will start before then.  A non-issue.

Prepare for NIRP (floating rate my ass).  Time to make all the bond holders pay and put those retirees on the cat-food diet.



fonzannoon's picture

When the bank pays the fine, I assume this fine is distributed in correct proportion to the victims, correct?

LMAOLORI's picture


"fonzannoon When the bank pays the fine, I assume this fine is distributed in correct proportion to the victims, correct?"

When the bank pays a fine it is distributed to it's CUSTOMERS

rsnoble's picture

$176billion? Bullshit. It's in the trillions. Bankers don't waste their time for billions.

fonzannoon's picture

Trillions in fines???? This is most excellent news. As this money is redistributed back into the hands of the victims of this scam the economy could actually see a robust and organic recovery begin at the expense of the big banks who caused all the harm!

reverse MDB

rsnoble's picture

Yeah I can't wait for my $2.35 class action lawsuit check lol.

ParkAveFlasher's picture

Personally, I'm afraid of clawback.  I had an ARM for about six years!

Meanwhile, HSBC just started charging me for all kinds of BS.  Looks like they already started clawing!

tsuki's picture

That I can only use to buy more worthless stock in the company that was sued. 

Whatta's picture

pshaw...settled out of court, the little guy will get shat upon, the big guy some millions of silence money and the perpetrators will continue to the next fleecing mechanism.

Banking will never change. Moneychangers always will win....if you stay in the system with them.

Inthemix96's picture

Fuck me,

Is anyone associated with either banking, politics, law firms straight?  One giant sceme of fuck the populace while those dirty bastards get rich quick.

Downright fucking criminal cunts

buzzsaw99's picture

Calpers is so stupid they will end up suing themselves because of all the worthless bank stock they hold. HAHAHAHA!! Dimon, blankfein, paulson, corzine, et al already got theirs and are untouchable bitchez.

Meesohaawnee's picture

yea. and what a about equities manipulation?

giovanni_f's picture

a gdp positive development

Hayek FA's picture

Fed announces monetisation of lawsuit claims, just lodge judgements with Fed for full re-imbursement.

also accepting pencil sharpenings, iphone 3's, nokia phones(all), typewriters & sincere handwritten IOU's


Problem solved

Dr. Engali's picture

Laywers will get 98% of the money and the plaintiffs will get a Spider man towel.

orangedrinkandchips's picture



I am a huge golfer. Love the sport as there is nothing better than a twilight by yourself in the middle of nowhwere (it would seem) at peace.


I watch a lot of golf too and I like Mick but the Barclays ad is not a good one to start with no matter the climate but Mick asking a golfer to play by the rules?


Ironic....just voice over the parts about a foot wedge and put in LIEbor.....

intric8's picture

The masses are too ignorant to understand the gravity of this libor scam. They are tuning into the Kardashians instead. Otherwise, there would be a revolution going on. Don't bother me with this heavy financial crap right now, basketball wives is about to come on.

Robot Traders Mom's picture

I totally headlined this shit...along with the other usual shenanigans of the "free world"




tmosley's picture

What about all those bank deposits that now pay essentially zero interest?  I would think the liability from that would be higher than the above total by itself.

etresoi's picture

Justice = lawyers feeding on bankers.

unununium's picture

"Few legal experts predict that [BBA banks] will file suits against other banks."

Sounds like somebody's worried about funds moving to the less corrupt arms of the syndicate. How would the WSJ know whether or not there might have been one bank among them who actually mailed in its actual borrowing costs each day?

Sorry but this has the ring of collusion and circling the wagons.

jjsilver's picture

Just wait until the Silver fraud explodes. Will make Libor look like childs play

Bank of International Settlements (BIS) Changed Silver Data From $203 to $93 Billion in Silver Liabilities


orangedrinkandchips's picture



Class Act (and lacktherof) is the easiest way out for these cocksucking serial criminals.


I DARE YOU.....SET AN EXAMPLE.....I HAVE ALL MY MONEY ON NOTHING HAPPENING! I would love to lose on this bet.

Chupacabra-322's picture

This may be the biggest Crime of Fraud in history. I just have one question.  Why hasn't anyone, as of yet, been arrested? 

LMAOLORI's picture


Chupacabra-322 "This may be the biggest Crime of Fraud in history. I just have one question.  Why hasn't anyone, as of yet, been arrested?"


Well it would take a while to make a case but even if one was made it's likely connections will trump prosecutions

CONVICTED: Bush 1300+, Clinton 1000+, Obama 0.0 (+/-)

Five Senior Goldman Sachs Execs Gave $130K To 'Obama Victory Fund' WHILE Eric Holder Was Deciding Whether To File Criminal Charges

Chupacabra-322's picture


The Criminals aren't even "hiding it in plain view" anymore.  The Elite are rubbing their Criminal behavior right in our Slave faces.  Perhaps you may want to read the following:

Did Eric Holder Cover Up FBI’s Role In ’95 OKC Bomb Plot?



The Criminal Cabals rabbit hole goes deep, very deep. 

disabledvet's picture

I thought libor kept interest rates low for borrowers. If that's fraudulent what does "real deal rate" look like?

Centurion9.41's picture

"as CalPERS adds, "we await the regulatory investigations, which will drive the outcome" of litigation."

I.e. Robo-Signing settlement writ LIBOR-Shaving....