Brussels, 22/02/2013 (Agence Europe) - Alongside the cash implications of the investigations by financial regulators in the United States and the European Union into rigging of the Libor, Euribor and Tibor financial benchmarks that are used to set rates for a number of currencies (the euro, the yen, the pound and the Swiss franc among others), since 2011 the European Commission has been investigating the anti-trust aspects of the Libor scandal, explained EU Competition Commissioner Joaquín Almunia on Friday 22 February in a speech in Paris.
Almunia said that he suspected the existence of cartels among various players in the derivatives markets - banks and traders. These possible anti-trust deals involve manipulating rates so that traders can make extra and unfair profits, explained the Commissioner. He said that the violation of anti-trust rules in the Libor scandal had been officially admitted by the Royal Bank of Scotland in a settlement with the US authorities, but unlike the US, which tends to react by getting the offending banks to sign settlements, the European Commission is looking at the big picture and combining cases. Almunia explained that if the investigations confirm his suspicions then he would be taking a combined approach. The Financial Times says the Commission is investigating a dozen banks and traders, and the banks could be fined up to 10% of turnover for each benchmark in which they are involved in a cartel (thus up to 30% if involved in cartels on Libor, Euribor and Tibor).
The Commissioner said that the European Commission is also investigating possible collusion among big investment banks to prevent the development of trading platforms for credit default swaps because the platforms could shed light on malpractice in the current closed book system. (FG/transl.fl)