By Foo Yun Chee
BRUSSELS Dec 3 EU antitrust regulators will
impose record multi-million euro fines on six banks including
Citigroup, Deutsche Bank and Royal Bank of
Scotland on Wednesday for rigging key interest rate
benchmarks, sources said.
The sanctions, the first by the European Commission for rate
manipulation and expected to top 1.5 billion euros ($2.04
billion), follow hefty fines on top banks for similar offences
from authorities in the United States, Britain and elsewhere.
The benchmarks involved in the three cases - the London
interbank offered rate Libor, the Tokyo and the euro area
equivalents - are used to price hundreds of trillions of dollars
in assets ranging from mortgages to derivatives.
JPMorgan and Barclays were also in the
group charged with manipulating Libor and the Tokyo interbank
offered rate Tibor, a person familiar with the matter said.
The banks admitted liability in return for a 10 percent
reduction in fines. UBS alerted the European
Commission to the yen interest rate derivatives wrongdoing and
will not be penalised.
Deutsche Bank and Royal Bank of Scotland will also be
penalised for rigging benchmark euro zone interest rates. French
bank Societe Generale is also part of the group facing
sanctions for alleged rigging of the rate known as Euribor.
HSBC and Credit Agricole are likely to be
penalised next year after refusing to settle the case with the
Commission. Barclays blew the whistle on the group and will not
It was not immediately clear if JPMorgan will be sanctioned
for its Euribor involvement on Wednesday or next year. Reuters
reported the imminent Euribor fines on Nov. 5.
EU Competition Commissioner Joaquin Almunia is expected to
announce the fines for the three cases at 1030 GMT on Wednesday,
a second person said.
Barclays, Deutsche Bank, Societe Generale, RBS, JPMorgan and
Citigroup declined to comment. HSBC and Credit Agricole were not
immediately available to comment.
Commission spokesman for competition policy Antoine
Colombani could not be immediately reached for comment.
Authorities around the world have so far fined UBS, RBS,
Barclays, Rabobank and broker ICAP $3.7 billion for manipulating
rates. Seven individuals face criminal charges.
UBS paid a record fine of $1.5 billion late last year to the
U.S. Department of Justice and the UK's Financial Services
Authority for rate-rigging. For a factbox on the biggest fines
handed down to banks.
EU fines can reach up to 10 percent of a company's global
turnover. RBS had a turnover of 25 billion pounds last year,
while Barclays was 29 billion pounds. Societe Generale's was
23.1 billion euros, Deutsche Bank's 33.5 billion euros and JP
Morgan's revenue was $97 billion.
The current record for an EU cartel fine is 1.47 billion
euros for a cartel involved with cathode-ray tubes.