In the wake of last year’s Libor scandal, the implicated banks agreed to settlements worth $2.5 billion. Now, as the U.S. Commodity Futures Trading Commission (CFTC) turns its attention to another important financial benchmark, those agreements may prove a powerful weapon in the agency’s investigatory arsenal.

ISDAfix is an obscure but important benchmark used by traders of interest rate swaps; as such, it has the power to move the $379 trillion market for these products. The CFTC has recently launched a probe to investigate whether banks and other parties have colluded to manipulate the benchmark. In doing so, the agency has received help from the three banks accused of rigging Libor: Barclays, RBS, and UBS. Those banks’ 2012 settlement agreements carried provisions requiring that they “cooperate fully and expeditiously” on “any investigation, civil litigation, or administrative matter related to the subject matter of this action or any current or future commission investigation.” Failure to abide by the agreement would result in criminal penalties. As a result, says one expert, the banks “have to cooperate [in the ISDAfix investigation] at the risk of blowing whatever agreements they have.”

Read the entire article, “Libor Settlements Said to Ease CFTC Path in Rate-Swaps Probe”