Exclusive: EU to fine Deutsche, JPMorgan and others in rate probe - source

Tue Nov 5, 2013 1:38pm EST
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By Foo Yun Chee

BRUSSELS (Reuters) - EU antitrust regulators are set to fine six global banks including Deutsche Bank, JPMorgan and HSBC after an investigation into the rigging of benchmark euro zone interest rates, a person familiar with the matter said on Tuesday.

The penalties, which will also target Royal Bank of Scotland (RBS), Credit Agricole and Societe Generale, represent the first punishments from Brussels as a result of its inquiry and are the latest costly payouts for an industry struggling to draw a line under past misdeeds.

The move comes two years after the European Commission, the EU's antitrust authority, raided a number of banks for suspected fixing of Euribor, a benchmark used as the basis for pricing 250 trillion euros ($338 trillion) of financial contracts, ranging from Spanish mortgages to complex derivatives.

Barclays, which alerted the European Commission to the suspected wrongdoing, will not be fined, the source said.

The penalties relate only to manipulation of Euribor. Banks suspected of rigging the London interbank offered rate, or Libor, could be fined next month when the Euribor penalties are announced, the source said.

Some of the banks have agreed a settlement with the Commission that would bring a 10 percent reduction in their fines, the source added.

Such settlements, which can prevent cases from dragging on for several years, typically involve companies admitting to wrongdoing.

Several of the banks will not be fined immediately because they are contesting the size of the proposed penalties. HSBC, Europe's largest bank, is one of those, two sources said. In these cases, the banks are likely to face formal charges next month, followed by fines next year, one of the people said.   Continued...

A logo of the Royal Bank of Scotland (RBS) is reflected in the window of a branch office in London November 1, 2013. REUTERS/Luke MacGregor