JPMorgan Chase & Co., Bank of America Corp. and 10 other lenders were sued by a group of U.S. homeowners who claim the banks conspired to manipulate the benchmark Libor rate, driving up the cost of mortgage loans, Bloomberg News reported yesterday. Libor, or the London interbank offered rate, is based on a British Bankers’ Association-commissioned daily survey that asks lenders to estimate how much it would cost to borrow money from each other for various periods in 10 different currencies. The figures are used to set interest rates for more than $300 trillion of securities and loans worldwide. The homeowners’ complaint, filed in federal court in Manhattan earlier this month, is one of several class action lawsuits seeking to hold banks responsible for the alleged manipulation of the rate used as a borrowing-cost benchmark. "Defendants' anticompetitive conduct had severe adverse consequences on the plaintiffs by increasing the interest rate charged on their LIBOR-based loans and causing them to suffer financial losses," the borrowers said in the Oct. 4 complaint. The lenders’ alleged conspiracy from January 2000 to February 2009 violated U.S. racketeering laws, the homeowners said.
