As Wall Street’s woes relative to the Libor rate manipulation scandal increase, their attention is turning inward as firms prepare to sue rivals over the possibility that other banks besides Barclays manipulated rates to make their balance sheets appear better than they really were.
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It could become a feeding frenzy of sharks as one analyst at a major firm proclaimed. The difficulty would be in proving how much money each firm lost as a result of the rate fixing. Complicating the issue is the sense that regulators knew the fixing was going on and took no steps to investigate further.
This could make lawsuits more complex between major firms. The fact that regulators knew about it and ignored the fraudulent activity effectively means regulators did not consider the practice illegal.
The Fed released reports recently that said it knew Barclays was underreporting rates. The Fed did recommend changes to Libor calculations. Still, the fact that Wall Street firms seem to be gearing up for a virtual civil war may make the firms their own worst enemies