“U.S. mortgage finance giants Fannie Mae and Freddie Mac may have suffered more than $3 billion in losses due to manipulation of the benchmark interest rate known as Libor, according to an internal memo by a federal watchdog.
The estimate was provided in a memo that was sent to Freddie and Fannie’s regulator, the Federal Housing Finance Agency, by its inspector general. Reuters obtained a copy of the memo. The watchdog urged the regulator to consider whether the losses warranted a lawsuit against the banks that set Libor.
“We conducted a preliminary analysis of potential Libor-related losses at Fannie and Freddie and shared that with FHFA, recommending that they conduct a thorough review of the issue,” a spokeswoman for the inspector general’s office said when asked about the memo. “FHFA agreed to study the matter further.”
A FHFA spokeswoman said the regulator “has not substantiated any particular Libor-related losses for Fannie Mae and Freddie Mac,” and the regulator “has not made any determination regarding legal action.”
“We continue to evaluate issues associated with Libor and monitor Libor-related developments, recognizing that other Federal agencies are also involved in related matters,” she added…”
If you enjoy the content at iBankCoin, please follow us on Twitter
