The European Commission (EC) has fined eight banks a total of €1.71 billion for manipulating benchmarks affecting the interest rate derivatives industry.
The EC ruled that from 2005-2008, Barclays, Deutsche Bank, RBS and Société Générale participated in a cartel manipulating the Euro Interbank Offered Rate (EURIBOR), affecting interest rate derivatives denominated in Euros. The EC also found that from 2007 to 2010, UBS, RBS, Deutsche Bank, Citigroup and J.P. Morgan participated in one or more bilateral cartels relating to interest rate derivatives denominated in Japanese yen by manipulating the London interbank offered rate (LIBOR).
In doling out fines, Barclays received immunity for revealing the existence of the Euro interest rate derivatives cartel, and by doing so, the bank avoided a fine of approximately €690 million. Of that group, Deutsche Bank received the steepest fine of nearly €466 million, followed by Société Générale at nearly €446 million and RBS at €131 million.
For the yen interest rate derivatives cartel, the EC granted immunity to UBS for revealing its existence, and thus the bank avoided an approximate €2.5 billion fine. RBS and Deutsche Bank received fines for this case of around €260 million each, while J.P. Morgan was fined nearly €80 million, and Citigroup was fined €70 million.
The EC also fined broker RP Martin €247,000 for its role in the yen cartel.
For Euro derivatives manipulation, the EC still has proceedings open against Crédit Agricole, HSBC and J.P. Morgan. For the yen derivatives, the EC has a proceeding open against cash broker ICAP.
EC Fines Banks €1.71 Billion in Interest Rate Derivatives Cases
The European Commission (EC) has fined eight banks a total of €1.71 billion for manipulating benchmarks affecting the interest rate derivatives industry.