European Union antitrust probes into possible fixing of the Libor and Euribor benchmark lending rates are “at an advanced stage,” an EU official said today.
Regulators suspect that “major banks and brokers manipulated the relevant benchmarks to their benefit,” Eric Van Ginderachter, the European Commission’s director of cartels, said at a Brussels conference. The probes are “clearly a top priority” for the antitrust authority, he said.
Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM:US), Barclays (BARC) Plc, HSBC Holdings Plc (HSBA) and Royal Bank of Scotland Group Plc (RBS) have all said they were quizzed by the EU over benchmark interest rates. The EU is investigating possible rigging of the London Interbank Offered Rate, or Libor, as well as Euribor and Tibor rates that may have affected derivatives denominated in yen, euro and Swiss francs.
Financial regulators in the U.K. and the U.S. have already imposed more than $2.5 billion in fines on Barclays, UBS AG (UBSN) and RBS, and are investigating other companies. Any EU antitrust fines will cover all the companies involved at once, EU Competition Commissioner Joaquin Almunia said last month.
The EU can levy fines of as much of 10 percent of a company’s yearly global revenue for each cartel in which they participate. Interest-rate derivatives markets were worth $20 trillion in 2011, according to Almunia. He said last week that companies involved in cartel probes such as Libor can request a settlement which would allow them to reduce a fine by as much as 10 percent.
Van Ginderachter said increasing numbers of companies are show interest in settling cartel probes. Regulators won’t negotiate on fines or on infringements of competition rules, he said. Recent settlement talks have taken from 10 months to 16 months to conclude, he said.
Officials are prepared to ditch settlements and adopt a more adversarial approach if progress isn’t being made, Van Ginderachter said.
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