* Rabobank, BayernLB become latest banks to quit Euribor
* Austria's Raiffeisen says it is considering its future
* Rabo says no plans to quit Libor
By Thomas Escritt and Marc Jones
AMSTERDAM/LONDON, Jan 4 Rabobank became the
highest profile European bank to quit money market benchmark
Euribor on Friday, dealing the credibility of the lending rate a
fresh blow as its future remains uncertain.
The Dutch cooperative, one of Europe's highest-rated banks,
confirmed it had quit the more-than 40-strong Euribor panel
after data showed it did not submit a contribution on Friday.
"The changed circumstances on the money market have strongly
affected Rabobank's business," it said in a statement given to
Reuters. "As a result, Rabobank evaluated its contribution to
the Euribor panel from a business economics point of view."
There was a second blow as German Landesbank BayernLB
said it had also withdrawn from Euribor, effective
from the start of 2013, for "strategic reasons".
Euribor and its larger counterpart Libor are Europe's key
gauges of how much banks pay to borrow from their peers, and
underpin swathes of financial products. But their future is in
doubt after it emerged last year that a number of banks had
manipulated the benchmarks for their own advantage in the past.
The Libor scandal toppled the leadership of Britain's
Barclays and cost UBS $1.5 billion in fines
last year. Other banks are also bracing for huge fines and the
possibility of criminal charges against bankers and executives.
Rabobank's is the highest-profile European departure from
Euribor to date and comes after Citi, one of the world's
biggest financial institutions, and Germany's Dekabank quit last
NO LIBOR EXIT
As banks look to protect their still-hurting reputations,
the appeal of being involved in setting interbank rates is being
increasingly questioned. If too many banks pull out, Euribor and
Libor could unravel completely.
A spokesman for Rabobank said it had no current plans to
withdraw from Libor but Austria's Raiffeisen Bank International
said it was considering its future in Euribor. "We are
evaluating that", said a spokesman.
Rabobank has already been touched by the rate-setting
scandal. It fired a number of traders over manipulation claims
between 2008 and 2011, according to one Dutch newspaper.
Some of its former employees were also suspended by Bank of
Tokyo-Mitsubishi UFJ last year in connection with a probe by UK
authorities into the rigging of interbank lending rates.
The European Commision is due to publish a review of Euribor
in coming weeks as authorities in Europe demand greater
transparency in the setting of interbank lending
Late last year the European Central Bank called Euribor
organisers, Euribor-EBF, to improve the credibility of the
benchmark by calculating it from actual bank-to-bank trades
rather than banks' estimates of what they pay to borrow.