Brussels - EU competition regulators fined six financial institutions, including Deutsche Bank, Royal Bank of Scotland and Citigroup, a record e1.71 billion (R23.9bn) yesterday for rigging financial benchmarks.
The penalty is the biggest yet to be handed down to banks for rigging the benchmarks used to determine the cost of lending. It is also the highest antitrust penalty ever imposed by the European Commission, the EU’s competition regulator.
The other banks penalised are Société Générale, JPMorgan and brokerage RP Martin.
Deutsche Bank received the biggest fine of e725.36 million.
The European Commission said it would continue to investigate Crédit Agricole, HSBC, JPMorgan and brokerage Icap for similar offences.
The benchmarks involved are the London interbank offered rate (Libor) the Tokyo interbank offered rate (Tibor) and the euro interbank offered rate (Euribor). They are used to price hundreds of trillions of dollars in assets ranging from mortgages to derivatives.
“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,” EU competition commissioner Joaquin Almunia said.
RP Martin and Icap could not be immediately reached for comment. Deutsche Bank said it had set aside enough money to cover most of the e725m fine.
JPMorgan confirmed its e79.9m penalty in the Tibor case but said it would defend itself in the Euribor case. Société Générale declined to comment.
Unlike the six banks that admitted liability in return for a 10 percent reduction in their fines, Crédit Agricole has refused to settle and will likely face sanctions next year. HSBC has also contested the EU’s proposed penalty.
An HSBC spokesman said the bank would defend itself vigorously in the Euribor case, while Barclays confirmed its co-operation with the Commission, which helped it stave off a e690m sanction.
Royal Bank of Scotland said its e391m penalty had been fully provisioned for.
Authorities around the world have handed down a total of $3.7bn (R38bn) in fines to UBS, Royal Bank of Scotland, Barclays, Rabobank and Icap for manipulating rates, while seven individuals face criminal charges.
UBS paid a record fine of $1.5bn late last year to the US Department of Justice and the UK’s Financial Services Authority for rigging rates.
EU fines can reach up to 10 percent of global turnover.
UBS blew the whistle on the Tibor case and will not be fined. Barclays will escape paying a fine in the Euribor case because it alerted the commission to the offence. – Reuters