Supervisors hear staff briefings and public pleas to seek recovery after LIBOR manipulation

The San Francisco Budget & Finance Committee heard an extended briefing and forceful public testimony Wednesday on whether the city lost money because of alleged manipulation of the London Interbank Offered Rate, known as LIBOR, and what legal or contractual steps the city should take.

"Whether we lost $10,000 or $10,000,000 as a city, we owe it to the taxpayers to aggressively pursue this issue to hold the banks accountable," Supervisor John Avalos said as he opened the hearing that drew staff presentations and more than an hour of public comment.

Why it matters: LIBOR has been a reference rate for a vast array of financial products worldwide. City financial managers and outside advisers told the committee that most San Francisco obligations are fixed-rate and therefore not affected, but some variable-rate facilities and interest-rate swaps tied to LIBOR could have been exposed. At the end of the hearing the committee voted to continue the matter to the call of the chair while the Budget Analyst and City Attorney's offices analyze next steps.

What staff told the committee - Nadia Sasse, director of the Office of Public Finance,…