Kirstin Ridley and Steve Slater, Reuters

While banks appear to be brushing off record fines for rigging interbank interest rates, investors are starting to worry about a rising tide of civil lawsuits from disgruntled customers.

UBS shares touched 18 month highs after U.S., Swiss and British regulators on Wednesday fined the bank a near record $1.5 billion for fiddling interest rates, the second regulatory fine for manipulating the London interbank offered rate (Libor) and its euro equivalent Euribor.

But the “big unknown” cost of repairing the damage caused by the fixing of rates used as a benchmark for pricing trillions of dollars worth of financial contracts is civil litigation, said Paras Anand, European equities head at Fidelity Worldwide Investment.

“That is one thing at the back of our minds that we have to be cognizant of,” Anand said. Fidelity Worldwide holds around 1.2 percent of UBS stock.

An early indication of the possible cost to the banking industry came hours after UBS was fined when the U.S. federal watchdog estimated mortgage lenders Fannie Mae and Freddie Mac, which had to be bailed out during the 2007/08 financial crisis, could have lost more than $3 billion as a result of Libor manipulation.

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