EU Commission hits banks with record fine for rate fixing

The EU has joined the British and American authorities by hitting a group of banks for fixing interest rates in a cartel.

The EU is imposing a record fine; 1.7 billion euros, which is also the first to be imposed on a financial cartel. It involves seven banks in all and two brokers. Two banks, Barclays and UBS avoided fines by spilling the beans on the racket.

“What is shocking about the LIBOR and EURIBOR scandals is not just the manipulation of benchmarks, which is a very serious infringement, but also the setting up of genuine cartels between a number of financial players. With today’s decision we want to send a clear message that the Commission is determined to fight and sanction these cartels in the financial sector,” said EU Competition Commissioner Joaquin Almunia.

Societe Generale, Deutsche Bank, RBS, Citigroup and JP Morgan were fined in the settlement, but the scandal that broke in 2012 is far from over. Almunia warned more fines would follow, and proceedings have begun against Credit Agricole, HSBC and JP Morgan, and brokers Icap.