European Union antitrust probes into whether banks and brokers manipulated benchmark lending rates such as Libor “may last longer” than those in the U.S., EU Competition Commissioner Joaquin Almunia said.
While U.S. authorities can strike plea bargains with individual companies, the EU must deal with all companies at once, he said in a speech in Brussels today.
“U.S., British and Swiss authorities have already closed their cases with three large European banks in the so-called Libor scandal,” Almunia said. The results of EU probes into a suspected cartel involving a large number of banks and brokers “will be announced in due time,” he said.
Settlement cases take an average of three years after a company first reports a cartel to regulators, Almunia said, while standard cartel cases take around five years.
Financial regulators in the U.K. and the U.S. have already imposed more than $2.5 billion in fines on Barclays (BARC) Plc, UBS AG (UBSN) and Royal Bank of Scotland Group Plc (RBS), and are investigating other companies over the manipulation of the London Interbank Offered Rate. Deutsche Bank AG (DBK), JPMorgan Chase & Co. (JPM:US), Barclays, HSBC Holdings Plc (HSBA) and RBS have all said they were asked about benchmark interest rates by the EU. Regulators in the bloc are investigating possible rigging of Libor, as well as related rates such as Euribor and Tibor.
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. The markets for interest-rate derivatives were worth $20 trillion in 2011, Almunia said in a speech last year. 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.
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