Shares of major banks fell as concerns regarding the London interbank offered rate (LIBOR) scandal spread. "The two-year investigation into banks rigging LIBOR, which has taken a toll on Barclays, has the potential to hurt Citigroup, JPMorgan and Bank of America," Mike Mayo, an analyst at CLSA Ltd., wrote in a recent research note.
Shares of Barclays plunged a day after the bank was ordered to pay a $451.4 million regulatory fine for attempting to rig benchmark interest rates. Bank of America, Citigroup and JPMorgan are among the banks currently being investigated by regulators from the U.S. and the UK.
"They're facing the possibility of large civil suits, and there's a great debate right now over whether these banks have reserves for litigation," said Nancy Bush, bank analyst and contributing editor to SNL Financial. "This is just one more issue they really didn't need."