NY Times’ Nathaniel Popper writes: As unemployment climbed
and tax revenue fell, the city of Baltimore laid off employees and cut services
in the midst of the financial crisis. Its leaders now say the city’s troubles
were aggravated by bankers’ manipulation of a key interest rate linked to
hundreds of millions of dollars the city had borrowed.
Baltimore has been leading a battle in Manhattan federal
court against the banks that determine the interest rate, the London interbank
offered rate, or Libor, which serves as a benchmark for global borrowing and
stands at the center of the latest banking scandal. Now cities, states and
municipal agencies nationwide, including Massachusetts, Nassau County on Long
Island, and California’s public pension system, are looking at whether they
suffered similar losses and are weighing legal action.
Dozens of lawsuits filed by municipalities, pension funds
and hedge funds have been consolidated into a few related cases against more
than a dozen banks that are involved in setting Libor each day, including Bank
of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays
admitted to regulators that it tried to manipulate Libor before and during the
financial crisis in 2008, and paid $450 million to settle the charges. It said
other banks were doing the same, but none of them have been accused of
wrongdoing….
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