[December 04, 2013]BRUSSELS (Reuters) — EU antitrust
regulators fined six financial institutions including Deutsche Bank,
Royal Bank of Scotland and Citigroup a record total of 1.71 billion
euros ($2.3 billion) on Wednesday for rigging financial benchmarks.
The move confirms what a source familiar with the matter had
previously told Reuters.
The penalty is the biggest yet to be handed down to banks for
rigging the benchmarks used to determine the cost of lending, one of
the most brazen violations of conduct since the financial crisis. It
is also the highest antitrust penalty ever imposed by the
Commission, the EU's competition regulator.
The other banks penalized are Societe Generale, JPMorgan and
brokerage RP Martin.
Deutsche Bank received the biggest fine of 725.36 million euros.
The European Commission said it would continue to investigate Credit
Agricole, HSBC, JPMorgan and brokerage ICAP for similar offences.
The benchmarks involved are the London interbank offered rate, or
Libor, the Tokyo interbank offered rate and the euro area
equivalents. 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 in a statement.
LIKELY SANCTIONS
RP Martin and ICAP could not be immediately reached for comment.
Deutsche Bank said it has set aside enough money to cover most of
the 725 million euro fine.
JPMorgan confirmed its 79.9 million euro penalty in the Libor case
but said it would defend itself in the Euribor case.. Societe Generale declined to comment.
Unlike the six banks which admitted liability in return for a 10
percent reduction in their fines, Credit Agricole has refused to
settle and will likely face sanctions next year. HSBC has also
contested the EU's proposed penalty.
Both banks are expected to be formally charged on Wednesday.
A spokesman for HSBC said the bank would defend itself vigorously in
the Euribor case, while Barclays confirmed its cooperation with the
Commission which helped it stave off a 690 million euros sanction.
RBS said its 391 million euro penalty had been fully provisioned
for.
Authorities around the world have so far handed down a total of $3.7
billion in fines to UBS, RBS, Barclays, Rabobank and ICAP for
manipulating rates, while seven individuals face criminal charges.
UBS paid a record fine of $1.5 billion late last year to the U.S.
Department of Justice and the UK's Financial Services Authority for
rate-rigging.
EU fines can reach up to 10 percent of a company's global turnover.
UBS blew the whistle on the Libor and Tibor cases and will not be
fined as a result. Barclays will escape a fine in the Euribor case
because it alerted the Commission to the offence.
[REUTERS MEDIA; By Foo
Yun Chee]
(Additional reporting by Matthias
Blamont in Paris, Steve Slater and Kirstin Ridley in London, Ludwig
Burger and Clare Hutchison in Frankfurt, Lionel Laurent in Paris;
Writing by John O'Donnell; editing by Luke Baker and David Holmes)
Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
The move confirms what a source familiar with the matter had
previously told Reuters.
