EU readies multi-million euro benchmark rigging fines: sources

Tue Dec 3, 2013 4:16pm EST
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By Foo Yun Chee

BRUSSELS (Reuters) - EU antitrust regulators will impose record multi-million euro fines on six banks including Citigroup, Deutsche Bank and Royal Bank of Scotland on Wednesday for rigging key interest rate benchmarks, sources said.

The sanctions, the first by the European Commission for rate manipulation and expected to top 1.5 billion euros ($2.04 billion), follow hefty fines on top banks for similar offences from authorities in the United States, Britain and elsewhere.

The benchmarks involved in the three cases - the London interbank offered rate Libor, the Tokyo and the euro area equivalents - are used to price hundreds of trillions of dollars in assets ranging from mortgages to derivatives.

JPMorgan and Barclays were also in the group charged with manipulating Libor and the Tokyo interbank offered rate Tibor, a person familiar with the matter said.

The banks admitted liability in return for a 10 percent reduction in fines. UBS alerted the European Commission to the yen interest rate derivatives wrongdoing and will not be penalized.

Deutsche Bank and Royal Bank of Scotland will also be penalized for rigging benchmark euro zone interest rates. French bank Societe Generale is also part of the group facing sanctions for alleged rigging of the rate known as Euribor.

HSBC and Credit Agricole are likely to be penalized next year after refusing to settle the case with the Commission. Barclays blew the whistle on the group and will not be fined.

It was not immediately clear if JPMorgan will be sanctioned for its Euribor involvement on Wednesday or next year. Reuters reported the imminent Euribor fines on November 5.   Continued...

People walk past a Citibank branch in New York October 15, 2013. REUTERS/Andrew Kelly