The collusion of International Banks in rate rigging being unraveled in EU Euribor probe

The collusion of International Banks in rate rigging being unraveled in EU Euribor probe

The collusion of International Banks in rate rigging being unraveled in EU Euribor probe



Several banks seek leniency in EU Euribor probe

Several banks under investigation for suspected rigging of euro interest rates have joined Deutsche Bank in giving information to EU antitrust regulators in the hope of lower fines if they are found guilty, two people familiar with the matter said on Monday.

The European Commission is investigating possible manipulation of the Euro Interbank Offered Rate (Euribor) benchmark rate at which banks lend in euros to each other.

The EU watchdog has not disclosed the names of the banks being investigated. They face fines of up to 10 percent of their global revenues if found to have breached EU antitrust rules.

Deutsche Bank, which sources say is already cooperating with the authorities, had revenues last year of 33.2 billion euros.

“Several banks have come forward with information to the Commission,” said one of the sources, who declined to be identified because of the sensitivity of the matter. This person declined to provide more details.

The second person said there could be at least two banks, besides Deutsche Bank, which have sought leniency under the European Commission’s scheme to encourage whistleblowers.

A total of 43 banks sit on the Euribor panel, which is hosted by the European Banking Federation. The rate is used as a reference for trillions of euros in euro-denominated loans and debt instruments.

Under the Commission’s leniency policy, the whistleblower gets off scot-free. Fines can be reduced by 30 to 50 percent for the next company to provide evidence of wrongdoing, and by 20 to 30 percent for the following applicant. Subsequent applicants can get a reduction in any penalty of up to 20 percent.

To qualify, companies must provide what the regulator terms “significant added value” information.

The Commission is also investigating possible manipulation of the London Interbank Offered Rate (Libor) and the Tokyo Interbank Offered Rate (Tibor).

Manipulation of Libor, which is used to set prices for trillions of dollars of financial products around the globe, has already landed Barclays <barc.l>with $453 million in penalties from U.S. and British regulators, and cost chief executive Bob Diamond his job. The rate-fixing scandal threatens to drag in several other banks.

Regulators in the United States, Japan and Singapore are also investigating various interest rate benchmarks.

Thomson Reuters Corp <tri.to>is the British Bankers’ Association’s official agent for the daily calculation and publishing of Libor.

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