Impact of Libor on council taxpayer finances

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Dear Liverpool 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.

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.

Please provide copies of: Treasury Management/ Legal/ Accountancy
and Financial advice and opinion provided to Liverpool 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

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
Liverpool's response to LIBOR market manipulation was discussed.

Yours faithfully

Joel Benjamin

Karen Hellon, Liverpool City Council

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Dear Mr Benjamin,

Please find attached our acknowledgement letter for your request for

Yours sincerely

Karen Hellon I Information Team
Liverpool City Council I Municipal Buildings I Dale Street I Liverpool I
L2 2DH
T: 0151 225 2303 I F: 0151 225 2392 I E: [1][email address]

Online: [2] 




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Andrea Glanville, Liverpool City Council

1 Attachment

Dear Mr Benjamin
Please see attached response to your request.
A Glanville
Information Manager

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