A US pension fund has begun a class-action suit against 10 of the world's largest banks for attempting to manipulate the interest rate swaps market.

Some of the largest banks in the world are accused in the class action lawsuit of plotting to rig the $320 trillion market for interest rate swaps, according to Reuters. The report says that the suit, filed in US District Court in Manhattan, accuses Goldman Sachs, Bank of America Merrill Lynch, JP Morgan, Citigroup, Credit Suisse, Barclays, BNP Paribas, UBS, Deutsche Bank, and the Royal Bank of Scotland of colluding to prevent the trading of interest rate swaps on electronic exchanges such as the ones on which stocks are traded. As a result, the lawsuit alleges, banks have successfully stifled competition from other types of financial institution that operate in the market.

As with many many class actions, this one bobs along in the wake of regulatory action. Many global banks have already been punished for manipulating the global interbank interest rate market, as with LIBOR. Such sagas have hit confidence in financial markets and prompted more demands for spending on compliance functions at banks.

Goldman Sachs, Citigroup, Bank of America, BNP Paribas, Credit Suisse and Royal Bank of Scotland declined to comment, the news service said, adding that JP Morgan, Barclays, Deutsche Bank and UBS were not immediately available to comment.

The suit was brought by The Public School Teachers' Pension and Retirement Fund of Chicago, which purchased interest rate swaps from multiple banks to help the fund hedge exposure against interest rate risk on debt.