9 more banks under scrutiny in Libor investigation

A state investigation into whether some of the world’s biggest banks manipulated key global interest rates has widened to 16 institutions, according to a source familiar with the matter.

New York state Attorney General Eric Schneiderman issued subpoenas to nine banks in late August as part of an investigation into alleged manipulation of the London Interbank Offered Rate, or Libor, according to the source, who was not authorized to speak publicly.

The Libor process generates rates, based on a survey of banks, that are used as benchmarks for roughly $10 trillion of loans and some $350 trillion of derivatives.

In June, U.K. bank Barclays (BCS)admitted to manipulating Libor to appear stronger during the financial crisis and to benefit its traders’ positions. As part of a settlement with U.S. and U.K. regulators, the bank agreed to pay $453 million.

Since then, other banks involved in setting Libor have come under scrutiny. Schneiderman previously subpoenaed Barclays, Citigroup (C,Fortune 500), Deutsche Bank (DB), HSBC (HBC), JPMorgan(JPM, Fortune 500), Royal Bank of Scotland (RBS) and UBS(UBS) in July and early August.

The newly disclosed subpoenas were sent to Bank of America (BAC,Fortune 500), Credit Suisse (CS), Societe Generale (SCGLF), Royal Bank of Canada (RY), Rabobank, Norinchukin Bank, Lloyds Banking Group PLC (LLDTF), Bank of Tokyo Mitsubishi UFJ and WestLB.

SOURCE: CNN