UK banks in rate-rigging settlement

Royal Bank of Scotland and Barclays are among a raft of global banking giants involved in a record 1.7bn euro (£1.4bn) settlement with European regulators in the latest rate-rigging crackdown

Royal Bank of Scotland
Royal Bank of Scotland

Royal Bank of Scotland and Barclays are among a raft of global banking giants involved in a record 1.7bn euro (£1.4bn) settlement with European regulators in the latest rate-rigging crackdown.

Eight banks have agreed penalties with the European Commission over allegations they formed cartels to fix two key benchmark interest rates used to set the price of trillions of dollars of financial products, from mortgages to complex financial products.

RBS will pay 391m euros (£325m) for its role in the attempted rigging of the Yen Libor and Euribor – the Tokyo and euro area equivalents of the London interbank offered rate (Libor).

But Barclays is immune from a potential 690m euro (£573m) penalty after blowing the whistle on the Euribor cartel.

The sanctions - the first from the EC on rate manipulation - are the highest yet for European antitrust enforcement. Barclays and state-backed RBS have already been fined following an investigation into the rigging of Libor, paying penalties of £290m and £391m respectively.

Other banks fined by the EC in the Euribor case are German group Deutsche Bank and French player Societe Generale.

Those involved in the Yen Libor case are RBS, Swiss group UBS, Deutsche Bank, US giants JPMorgan Chase & Co and Citigroup and UK-based wholesale broker RP Martin.

UBS avoided a 2.5bn euro (£2.1bn) fine after flagging up the Yen Libor cartel with the EC. Fellow British bank HSBC is understood to have pulled out of the Euribor settlement talks, alongside US group JPMorgan Chase & Co and French group Credit Agricole, while broker ICAP is said to have refused settlement in the Yen Libor probe.

The EC said cartel investigations involving these firms will continue.

Joaquin Almunia, EC vice-president in charge of competition policy, said: “Today’s decision sends a clear message that the commission is determined to fight and sanction these cartels in the financial sector.”

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