France has launched a probe into suspected rigging of Libor interbank lending rates after a complaint filed by a shareholder in Societe Generale bank, a judicial source said on Monday. The Libor rates are benchmarks for a vast range of instruments at the heart of the global financial system.
A preliminary investigation was launched in September, the source said. The plaintiff had alleged "manipulation," his lawyer Frederick-Karel Canoy said. The scandal erupted when Barclays bank was fined £290 million ($470 million, 363 million euros) by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009.
Britain's Barclays bank is the only bank to have been fined so far, but it is widely believed that at least 15 banks globally are being investigated for possible manipulation of Libor rates. Libor is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. Euribor is the eurozone equivalent. The Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.
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