Impact of Libor on council taxpayer finances

Waiting for an internal review by Westminster City Council of their handling of this request.

Dear Westminster City Council

UK local authorities had in excess of £31 billion invested in banks, building societies and money market funds as at 2008/09 when the Icelandic crisis saw taxpayer monies frozen in offshore accounts. The local government pension fund is £180 billion, with total UK pension fund assets of approximately $3 trillion.

LAPF has given advice to pension fund managers to determine the impact of LIBOR on pension funds. http://www.lapfinvestments.com/2012/07/p...

Since the LIBOR scandal broke last year, we know that LIBOR was rigged for a period of 5 - 7 years, and earlier IMF research by Randall Dodd indicated LIBOR was artificially manipulated lower by 30 basis points or 0.3% for a period of 3 years +, reducing the interest payable on taxpayer investments.

Where investment returns are pegged to the LIBOR rate, moving the needle 1 basis point on a £1 billion investment would result in changes to the annual return on investment of +/- £100,000.00 - adversely affecting public finances and the ability to maintain public services in a time of austerity.

I am aware the SFO are currently investigating numerous banks to determine the full impact and extent of LIBOR rigging, and a parallel market fixing case is working its way through the EU. However as yet considerably less attention has been given to identifying potential victims of LIBOR fraud.

One of the principle victims of LIBOR fraud is local authorities and public institutions with billions of pounds of surplus funds and pensions invested - with returns and pension fund management fees pegged to the manipulated libor rate.

In recent weeks we have seen USA municipalities of Houston and Philadelphia file law suits against 16 global banks related to libor manipulation and civic finances. http://www.chicagotribune.com/news/sns-r...

Please provide copies of: Treasury Management/ Legal/ Accountancy and Financial advice and opinion provided to Westminster Council (including council minutes) in relation to:

1. The scale of actual or potential LIBOR manipulation undertaken by UK, EU and global banks, to which the Council has financial exposure.

2. The actual, or potential impact of LIBOR manipulation upon Council managed investments, savings, pension funds, interest rate swaps, derivatives, and other interest hedging products pegged to the LIBOR rate.

3. DCLG, Treasury or Government advice on the scale of LIBOR manipulation, its actual or potential impact to local government, and options for legal recourse to recover lost taxpayer funds.

4. Minutes of relevant council meetings where LIBOR and Westminster's response to libor market manipulation was discussed.

Yours faithfully

Joel Benjamin

Westminster City Council

Confirmation of Freedom Of Information Request

Thank you for your request for information.

Your request details have now been recorded and will be passed on to the
appropriate Divisional Records Officer for action.

This Freedom Of Information Request was based on the following
information:

Name: Joel Benjamin
Address: See email address
Email: [FOI #170792 email]
Telephone:
Request Details: Please provide copies of: Treasury Management/ Legal/
Accountancy and Financial advice and opinion provided to Westminster
Council (including council minutes) in relation to:

1. The scale of actual or potential LIBOR manipulation undertaken by UK,
EU and global banks, to which the Council has financial exposure.

2. The actual, or potential impact of LIBOR manipulation upon Council
managed investments, savings, pension funds, interest rate swaps,
derivatives, and other interest hedging products pegged to the LIBOR rate.

3. DCLG, Treasury or Government advice on the scale of LIBOR manipulation,
its actual or potential impact to local government, and options for legal
recourse to recover lost taxpayer funds.

4. Minutes of relevant council meetings where LIBOR and Westminster's
response to libor market manipulation was discussed.

Yours faithfully

FOI Reference Number: 11188
Target Completion Date: 28/08/2013

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FOI, Westminster City Council

Dear Joel Benjamin

 

Thank you for your request for information. Your request for information
has now been considered and has met.

 

1. The scale of actual or potential LIBOR manipulation undertaken by UK,
EU and global banks, to which the Council has financial exposure.

 

2. The actual, or potential impact of LIBOR manipulation upon Council
managed investments, savings, pension funds, interest rate swaps,
derivatives, and other interest hedging products pegged to the LIBOR rate.

 

3. DCLG, Treasury or Government advice on the scale of LIBOR manipulation,
its actual or potential impact to local government, and options for legal
recourse to recover lost taxpayer funds.

 

4. Minutes of relevant council meetings where LIBOR and Westminster's
response to libor market manipulation was discussed.

 

I can confirm that there has been no impact of LIBOR manipulation upon
Council managed investments, savings, pension funds, interest rate swaps,
derivatives, and other interest hedging products pegged to the LIBOR rate.
This is due to the Council taking the view that impact would be very
limited

 

Yours Sincerely,

 

Contract Performance Team

 

 

 

 

Knowledge & Information Management Team

 

Westminster City Hall

10th Floor East

64 Victoria Street

London

SW1E 6QP

T: 0207 641 3921

F: 0207 641 2872

E: [email address]

 

 

 

 

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Dear Westminster City Council,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Westminster City Council's handling of my FOI request 'Impact of Libor on council taxpayer finances'.

The FOI response did not address the questions asked, provided no background information or documents regarding the advice given to Westminster regarding the impact of Libor, nor how 'due diligence' duties to assess the actual or potential impacts of Libor on council investments and pensions were discharged.

On what basis, and upon who's recommendation has Westminster adopted the position that the impact of Libor would be "very limited"?

Furthermore, no FOI exemptions were applied in not answering these questions or providing requested internal and external communications.

Please rectify and respond in full asap.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/i...

Yours faithfully,

Joel Benjamin

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