Banks brace for €1.7bn EU fines over Libor

a_drop_in_the_bucket

I don’t know about you, but this seems like a public ceremonial slap on the wrist for some people who should be thrown in prison.

via The Telegraph

Some of the world’s biggest banks are to be “fined a record €1.7bn” (£1.4bn) by European authorities to settle allegations of rigging benchmark borrowing rates used to set the price of trillions of dollars of financial products, according to reports.

The European Union competition authorities could announce the penalties as early as Wednesday, with up to 10 banks, including Royal Bank of Scotland, Deutsche Bank and Societe Generale, expected to settle cases, according to the Financial Times.

EU officials have been investigating claims that several large banks attempted to manipulate yen and euro-denominated Libor rates as part of an international probe.

Deutsche Bank and RBS are said to be facing fines for manipulating both rates, while other banks will settle claims related to just one of the rates. RBS declined to comment. Deutsche Bank was not immediately available for comment.

RBS has already settled with the UK and US authorities over Libor-rigging and paid a total of £390m in fines to close the investigations.

According to the report, Barclays and UBS have been granted immunity from any fines as they blew the whistle on the rigging. Barclays declined to comment. UBS was not immediately available for comment.

Barclays was the first bank to admit its involvement in attempts to rig Libor and paid £290m in fines in June 2012. UBS has also settled a series of investigations into its involvement in rate manipulation, reaching a $1.5bn settlement 12 months ago with UK, US and Swiss authorities.

London-listed interdealer broker ICAP has also settled claims over Libor, while Dutch lender Rabobank paid a $1bn fine in October.

However, the EU fines would mark the first time several institutions have settled at the same time and could also see the first US bank admit its involvement in the scandal, with Citigroup reported to be among the banks that will agree to pay a fine.

According to the report, some banks have yet to reach a deal with the EU, with HSBC and JP Morgan said to be refusing to sign up to the settlement.

The fines are likely to reach up to several hundred million euros each, with penalties decided on the basis of each bank’s level of involvement in the manipulation as well as the degree of cooperation with the EU investigation.

Several other countries have undertaken their own investigations into Libor-rigging, including Canada, Japan and Singapore.

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  • DeepCough

    This isn’t a “slap on the wrist.”
    This is the cost of doing business.

  • Rhoid Rager

    I recently heard Chris Martenson talking about how the near systemic banking failure that ‘we’ came close to in 2008 would have halted global trade and brought us into a depression of untold misery, since all global physical trade (through shipping) relies on bank credit to function. I always find it difficult to apprehend the depth and breadth of betrayal our ‘leaders’ have perpetrated against us–so much so, that the only way I can reconcile what’s going on around the world with what I’ve been taught through decades of schooling is that governments don’t run the world, banks do.

    • echar

      Maybe those way back when who were stuffing their mattresses with cash weren’t crackpots afterall.

      • Rhoid Rager

        If one wanted to go full crackpot, one would adjust to living without money, perhaps.

        • echar

          In such a case, success may be simple; dependant upon chosen perception. As long as Maslow’s basic needs are met. It’s when one chooses to lose esteem over lack of reach towards the higher pinacle, that one may crack.

          Comparisons can be the fuel for which one may douse themselves in a slow and unconscous self immolation. This is but one face of Thanatos.

  • gustave courbet

    “A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don’t do one.”

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