Federal authorities are investigating whether some major banks conspired to improperly manipulate an important interest rate before and during the financial crisis, according to a published report.
The Wall Street Journal, citing unnamed people familiar with the inquiry, reported Thursday that the Justice Department and Securities and Exchange Commission are examining if the banks understated their borrowing costs, which help determine the London interbank offered rate, called Libor. It's an average rate set by banks each morning that measures how much they're going to charge each other for loans.
It affects the costs of hundreds of trillions of dollars in loans and investments such as bonds, auto loans and derivatives.
The banks being investigated include Bank of America Corp., Citigroup Inc. and UBS AG, according to the Journal article.
UBS, Switzerland's largest bank, disclosed in its 2010 annual report that it had received subpoenas from agencies investigating the matter. Spokesmen for UBS, Bank of America and Citigroup declined to comment Thursday.
Justice Department spokeswoman Alisa Finelli and SEC spokesman John Nester also declined to comment.