Several U.S. states have joined the investigations swirling around the illegal manipulation of the bank-to-bank interest rate known as "Libor" — an international scandal that may have cost governments and consumers billions of dollars.
"Libor" is a shorthand term for the London Interbank Offered Rate, a key measure that sets the basis for interest rates on financial instruments around the world. The attorneys general in Connecticut and New York have led the charge thus far, working together since early this year.
Regulators in the U.S. and the United Kingdom have charged that some banks manipulated Libor as they reported borrowing costs, either overstating or understating the figures to depress or inflate the rate. Some contend the false reporting was an attempt to puff up a bank's standing — lower costs, for example, would signal lower risk.
Massachusetts, Florida and North Carolina have confirmed that they are formally investigating the matter. Maryland is contemplating a formal investigation, and several other states are quietly participating in the effort as well.