1. Why do you think Fannie Mae waited more than six months after Freddie mac fil

Question

1.   Why do you think Fannie Mae waited more than six months after Freddie mac filed a similar suit against more than dozen banks?

2.   Four of the banks-Rabobank, RBS, UBS and Barclays- have reached settlements with regulators in which they admitted wrongdoing and agreed to pay billions of dollars in total. How would you expect such settlements to affect Fannie Maes suit?

3.   How would the alleged manipulation lead to losses for Fannie Mae? Why wouldnt any losses on swaps be offset by gains on the mortgages Fannie Mae was hedging?

Explanation / Answer

Fannie Mae sued nine of the world's largest banks over alleged manipulation of interest rates,

joining the legal battles in the rate-rigging scandal.

The lawsuit, filed Thursday in U.S. District Court in Manhattan, said that the mortgage-finance giant sustained an estimated $800 million in damages from banks that allegedly manipulated the London interbank offered rate and other financial benchmarks.

Fannie also sued the British Bankers' Association, a private association of large British banks.

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