The European Commission has fined six banks a record €1.7 billion for forming illegal cartels to manipulate global interest rates.
The banks participated in “illegal cartels in markets for financial derivatives covering the European Economic Area (EEA)”, forming an undercover alliance to rig Libor and Euribor interest rates in interbank lending.
Among the main accused were Deutsche Bank (fined €725 million), Société Générale (€446 million), Royal Bank of Scotland (€391 million), JP Morgan Chase (€80 million), Citigroup (€70 million) and RP Martin Holdings (€247,000).
Barclays and UBS let out a sigh of relief as they were spared soaring penalties for being the first to alert authorities to the violations. However, the fines could have gone up to €2.5 billion for UBS and €690 million for Barclays.
Joaquín Almunia, Commission Vice-President in charge of competition policy, said: “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.”
