Impact of Libor on council taxpayer finances

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Dear Norfolk County 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 Norfolk County 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
Norfolk's response to LIBOR market manipulation was discussed.

Yours faithfully

Joel Benjamin

Information Management, Norfolk County Council

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Jenny Perryman left an annotation ()

It's unfortunate that the reply from NCC requires a password, which prevents anyone else being able to read their response, as I would be very interested to know what it was.

mr j garlits left an annotation ()

So would I.

Why did they encrypt this reply? It is public information.