In 2004 UBS and Bank of America sold the city of Oakland, California interest rate swaps to hedge variable rate debt on concurrently issued bonds with a total principle amount of $117.2 million. The beginning notional amount on these swaps was $117.2 million.
Beginning in 2007, or perhaps even earlier, UBS used its position on the British Bankers Association LIBOR rate setting panel to manipulate the interest rate so that derivatives such as the banks swap with Oakland would put the bank further in the money. Bank of America is alleged to have participated in these rate rigging actions, costing Oakland perhaps $300,000 over the swap's term.
Original Title
UBS and Bank of America Interest Rate Swaps with Oakland, California
In 2004 UBS and Bank of America sold the city of Oakland, California interest rate swaps to hedge variable rate debt on concurrently issued bonds with a total principle amount of $117.2 million. The beginning notional amount on these swaps was $117.2 million.
Beginning in 2007, or perhaps even earlier, UBS used its position on the British Bankers Association LIBOR rate setting panel to manipulate the interest rate so that derivatives such as the banks swap with Oakland would put the bank further in the money. Bank of America is alleged to have participated in these rate rigging actions, costing Oakland perhaps $300,000 over the swap's term.
In 2004 UBS and Bank of America sold the city of Oakland, California interest rate swaps to hedge variable rate debt on concurrently issued bonds with a total principle amount of $117.2 million. The beginning notional amount on these swaps was $117.2 million.
Beginning in 2007, or perhaps even earlier, UBS used its position on the British Bankers Association LIBOR rate setting panel to manipulate the interest rate so that derivatives such as the banks swap with Oakland would put the bank further in the money. Bank of America is alleged to have participated in these rate rigging actions, costing Oakland perhaps $300,000 over the swap's term.