On Monday (July 16) at a meeting of the full Council Mayor Rokhsana Fiaz made an announcement regarding Newham Council borrowing and a specialist type of loan known as Lender Option Borrower Option.
The LOBO was taken out previously by the council.
Mayor Fiaz said: “Newham has decided to launch independent legal action against Barclays Bank as we have serious concerns regarding the mis-selling of LOBO loans and manipulation of the London Interbank Offered Rate (LIBOR) by Barclays and potentially other banks.
“We continue to gather expert legal opinion but we would want to recover money potentially denied to us at a time when local services face the prospect of being diminished because of central government’s continued austerity drive that is causing havoc and stretching out resources for Newham residents.”
LIBOR is a benchmark rate that some of the world’s leading banks charge each other for short-term loans.
Added the Mayor: “We understand that we were the first of a number of local authorities to lodge a protective claim at the High Court about this. Since this is now a legal matter, and live, the Council can't make any further comments, but we'll be making sure we update residents as soon as we are able.”
Newham’s claim is separate to an announcement made by another fourteen councils earlier this week to pursue their own claims against Barclays over LOBO loans.