The LIBOR rigging had nothing to do with tipping Detroit into bankruptcy.

As I noted on this thread back on Nov. 4, 2011, Mayor Cockrel and the City Council agreed in April 2009 to pledge the city's casino wagering revenues as collateral to avoid paying a crippling $400 million termination payment for having violated their interest rate swap agreement. The city violated the agreement when Detroit's debt was downgraded by the ratings agencies. The downgrade was the result of the Kilpatrick administration's habitually late audits.

Therefore, like the proverbial butterfly whose beating wings created air currents that evolved into a hurricane, the late audits started a cascade of events that resulted in the inability of the City Council to use casino revenue as collateral for short term tax anticipation notes as they normally have done in the past, since it was already pledged to solve the interest rate swap problem. This further exacerbated the city's cash flow crunch, hastening the downward spiral into bankruptcy.