Global Banks Said to Get EU Fines Over Swiss Franc Libor

By Aoife White  

Global banks embroiled in a scandal for manipulating benchmark interest rates face European Union fines as soon as next week, according to two people with knowledge of the case.
The European Commission is poised to announce penalties over rigging of Libor rates linked to the Swiss franc, said the people who asked not to be identified because details of the probe are confidential. UBS AG (UBSN), JPMorgan Chase & Co. (JPM), Credit Suisse Group AG (CSGN) and Royal Bank of Scotland Group Plc were among at least four banks in talks to settle the probe earlier this year, Bloomberg News reported in January.
The penalties would add to last year’s record 1.7 billion-euro penalty ($2.2 billion) for Deutsche Bank AG and five other companies that were fined for colluding over derivatives linked to the London and euro interbank offered rates. The EU is also i
nvestigating banks over the suspected rigging of foreign exchange rates.
EU Competition Commissioner Joaquin Almunia, who’s racing to complete cases before he leaves office on Oct. 31, yesterday declined to comment on the timing of the Swiss franc decision. His spokesman, Antoine Colombani, today also declined to comment. UBS representatives didn’t immediately respond to a request for comment. JPMorgan, Credit Suisse and RBS declined to comment.
Regulators have been examining suspected manipulation of Swiss franc Libor rates across the world and the Swiss Competition Commission is also looking into the matter. EU cartel settlements typically involve an admission of liability and fines.

EU Settlements

The EU settlement procedure was introduced in 2008 as a way to speed up investigations. By doing a deal with the commission, companies get a discounted fine in return for saving the EU regulator the trouble of building up a complex case.
As well as offering reduced fines for banks that settle, the EU also allows immunity from penalties for companies that blow the whistle on cartels. UBS dodged 2.5 billion euros of fines in the EU’s yen Libor case for being the first to give information on how traders manipulated that benchmark.