A man walks past the headquarters of JPMorgan Chase on Park Avenue in midtown Manhattan on July 13, 2012 in New York City.
A man walks past the headquarters of JPMorgan Chase on Park Avenue in midtown Manhattan on July 13, 2012 in New York City. - 
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Jeremy Hobson: Yesterday morning we told you that Standard Chartered Bank was settling with regulators over allegations it hid transactions with Iran. Well today, there's word that a number of other banks -- including JPMorgan Chase and Citigroup -- are being subpoenaed by regulators in New York and Connecticut. Nothing to do with Iran, this time. It's all about charges that the banks rigged an interest rate called LIBOR.

Marketplace New York bureau chief Heidi Moore is here to explain. Good morning, Heidi.

Heidi Moore: Good morning Jeremy.

Hobson: Well first, a refresher on LIBOR please.

Moore: LIBOR is an interest rate; it governs mortgages, credit cards and student loans. It's set in London every day by a group of 18 banks who estimate how much it would cost them to borrow money -- so it's like you estimating your weight: you're probably going to lie about it. The allegations are that back in 2005 to 2007, they inflated LIBOR to make more money. Then in 2007- 2010 -- when banks were in trouble -- they may have understated LIBOR to make themselves look more credit-worthy, and that people liked them enough to lend to them.

Hobson: What's the significance today of this move by the New York and Connecticut Attorneys General?

Moore: It's the first significant legal action taken by any U.S. regulators. But they're not the only ones. There's been a hilarious lineup. JP Morgan disclosed recently it was being interviewed by seven or eight regulators, including the SEC, European Commission, in the U.K., Canada, the Swiss Competition Commission -- everyone's on it.

So I talked to Jonathan Armstrong. He's a partner with Duane Morris in London.

Jonathan Armstrong: It's almost like the LIBOR scandal is the last train out of town and everybody's running to get on it. There's a lineup of regulators who are sprinting to announce their investigations.

Hobson: And Heidi, why does it seem like the states rather than the Federal government are at the front of this train leading the chargers?

Moore: They have advantages when they're leapfrogging -- they're smaller, more nimble. They tend to have more direct legal power to take banks to court, which is a good bludgeon. And they get to pick their spots -- the federal regulators are tackling a lot of investigations. But the federal regulators are often really annoyed that the states run ahead, so it's a very "Hello Newman" type of situation.

Hobson: Marketplace New York bureau chief Heidi Moore, thanks a lot.

Moore: Thank you.

Follow Heidi N. Moore at @moorehn