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.
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.
[ID:nWNBB037YI]. 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.
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