Nebraska is part of a $100 million settlement with Barclays Bank over allegations the bank manipulated a benchmark interest rate that has a wide-ranging impact on global markets.
An investigation conducted on behalf of 43 state Attorneys General found Barclays manipulated LIBOR in two ways during the periods leading up to the Great Recession.
First, between 2007 and 2009, managers for Barclays told LIBOR submitters to lower their LIBOR settings to mask that Barclay had to pay higher interest rates due to its financial status. Second, between 2005 and 2007 and to some extent into 2009, LIBOR submitters agreed to the request of Barclay managers to change LIBOR settings to benefit the company’s trading positions. Barclay is also accused of colluding with other banks to obscure the published LIBOR so it did not reflect the true cost of borrowing funds.
The maneuvers cost governments and non-profits throughout the United States millions of dollars.
The largest portion of the settlement fund, $93.35 million, will pay compensation. The remainder will pay the cost of investigation.
Barclays is the first of several banks under investigation for suspected manipulation of LIBOR.
The states joining the Barclays settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming. The investigation into the conduct of several other USD LIBOR-setting panel banks is ongoing.