Indiana University

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Tuesday, July 17, 2012

Last modified: Tuesday, July 17, 2012

Libor scandal creates complex legal issues for U.S. financial market: IU Maurer School of Law expert

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FOR IMMEDIATE RELEASE
July 17, 2012

BLOOMINGTON, Ind. -- The growing scandal over the manipulation by British banks of the London Interbank Offered Rate, or Libor, creates complex legal issues for U.S. financial regulation, according to an Indiana University Maurer School of Law expert.

"Although the rate-fixing charges are focused on banks in England, the scandal affects banks in the United States in several significant ways," professor Hannah L. Buxbaum said. "While many of the banks under investigation are foreign banks, their activities affected financial markets within the U.S."

She noted that although the general public may not be familiar with Libor, it is used as a benchmark for the pricing of $750 trillion in financial products throughout the world.

Buxbaum said the global nature of the crisis poses several interesting challenges, both for U.S. regulatory agencies and for U.S. courts addressing eventual private lawsuits brought against the foreign institutions.

"For example, how do U.S. regulators go after foreign banks engaging in collusive activities overseas?" she said. "Which country's antitrust laws apply? What is the impact of foreign privacy laws or bank secrecy laws on the gathering of evidence from foreign banks?"

Buxbaum is interim dean and John E. Schiller Chair in Legal Ethics at the Indiana University Maurer School of Law. She is an expert in international antitrust and securities litigation and international jurisdiction and has written extensively on international antitrust and securities regulation. Her work has been cited by the U.S. Supreme Court. Buxbaum can be reached at 812-855-8886 or hbuxbaum@indiana.edu.


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