Banks face US libor probe

British banks are among seven subpoenaed in the US over the possible manipulation of an important global interest rate, it was reported tonight.

The attorneys general of New York and Connecticut have issued subpoenas to Citigroup, Deutsche Bank, JPMorgan Chase, UBS and British banks Barclays, HSBC and Royal Bank of Scotland, a source told AP.

American and British regulators have already fined Barclays $453 million.

The bank has admitted that it submitted false information to keep the rate, known as Libor, low.

Libor, short for London interbank offered rate, is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.

It is a self-policing system and relies on information that global banks submit to a British banking authority.

The New York and Connecticut attorneys general issued the subpoenas because Libor is also used to determine the rates for the bonds issued by city and county governments, the source told AP.

Barclays has admitted that it submitted figures that were lower than accurate for its interbank borrowing, including during the financial crisis in the fall of 2008. Those reports made it appear that Barclays was healthier than it was.

UBS filed a report with regulators on July 31 saying that agencies, including state attorneys general were examining whether it and other banks had tried to manipulate the rate.

A spokeswoman for Barclays declined further comment.

Citigroup and JPMorgan Chase also declined to comment.