Libor Manipulation Cost States, Cities At Least $6 Billion: Study

Libor Manipulation Cost States, Cities At Least $6 Billion: Study

"States, cities and other municipal borrowers have lost at least $6 billion as a result of banks manipulating Libor, the short-term lending rate that affects borrowing costs and $800 trillion or so in derivatives contracts around the world, according to a study by Peter Shapiro, managing director of Swap Financial Group in South Orange, New Jersey. The study was first reported on Tuesday by Bloomberg.
This $6 billion in losses would come on top of the $4 billion that muni borrowers have already paid big banks to close out derivatives trades that went bad, partly because of Libor manipulation, according to Shapiro.
As Bloomberg notes, state and local governments can hardly afford to throw away $10 billion:"