4 Dec 2013
European Commission fines eight banks for fixing rates
FXstreet.com (Łódź) - Following an investigation led since October 2011, the European Commission finally announced its decision on Wednesday to fine eight European and American financial institutions a total of €1.71B for “participating in cartels in the interest rate derivatives industry.”
Deutsche Bank was hit the hardest with a fine of €725M. Société Générale was fined €446M, RBS €391M, JPMorgan and Citigroup between €70-80M, UK broker RP Martin €247K. Barclays has escaped penalty as it revealed the existence of the cartel to the EC.
The EC led two separate investigations in the matter, one concerning interest rate derivatives denominated in the euro currency (in which four firms were involved). The other concerned interest rate derivatives denominated in Japanese yen (in which six firms were involved).
EU's competition commissioner, Joaquin Almunia commented following the EC's announcement: “What is shocking about the LIBOR and EURIBOR scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other.”
“Today's decision sends a clear message that the Commission is determined to fight and sanction these cartels in the financial sector. Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few."
Almunia added that the European Commision was still investigating companies which declined to settle and that it might look into the foreign exchange market as well.
Deutsche Bank was hit the hardest with a fine of €725M. Société Générale was fined €446M, RBS €391M, JPMorgan and Citigroup between €70-80M, UK broker RP Martin €247K. Barclays has escaped penalty as it revealed the existence of the cartel to the EC.
The EC led two separate investigations in the matter, one concerning interest rate derivatives denominated in the euro currency (in which four firms were involved). The other concerned interest rate derivatives denominated in Japanese yen (in which six firms were involved).
EU's competition commissioner, Joaquin Almunia commented following the EC's announcement: “What is shocking about the LIBOR and EURIBOR scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other.”
“Today's decision sends a clear message that the Commission is determined to fight and sanction these cartels in the financial sector. Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few."
Almunia added that the European Commision was still investigating companies which declined to settle and that it might look into the foreign exchange market as well.