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| E.U. Imposes 1.7 Billion Euros in Fines Over Rate-Rigging Scandal | |
| (35 minutes later) | |
| LONDON — The European Union has fined eight banks a combined 1.7 billion euros in a historic accord over alleged collusion to fix two benchmark interest rates. | LONDON — The European Union has fined eight banks a combined 1.7 billion euros in a historic accord over alleged collusion to fix two benchmark interest rates. |
| The settlement, worth about $2.3 billion and announced by European Union antitrust officials on Wednesday, relates to alleged actions by traders at some of the world’s largest banks, including Citigroup, Royal Bank of Scotland and Deutsche Bank. The banks were accused of fixing rates for the London interbank offered rate, or Libor, as it relates to the Japanese yen and the euro interbank offered rate, or Euribor. | The settlement, worth about $2.3 billion and announced by European Union antitrust officials on Wednesday, relates to alleged actions by traders at some of the world’s largest banks, including Citigroup, Royal Bank of Scotland and Deutsche Bank. The banks were accused of fixing rates for the London interbank offered rate, or Libor, as it relates to the Japanese yen and the euro interbank offered rate, or Euribor. |
| “The commission is determined to fight these cartels in the financial sector,” said Joaquín Almunia, the European Union’s competition commissioner, at a news conference in Brussels. | “The commission is determined to fight these cartels in the financial sector,” said Joaquín Almunia, the European Union’s competition commissioner, at a news conference in Brussels. |
| The penalties come after five financial institutions, including Barclays, R.B.S. and UBS, previously admitted wrongdoing and agreed to pay more than $3 billion combined to regulators in the United States, Britain and Switzerland over collusion to fix the Libor rate. | The penalties come after five financial institutions, including Barclays, R.B.S. and UBS, previously admitted wrongdoing and agreed to pay more than $3 billion combined to regulators in the United States, Britain and Switzerland over collusion to fix the Libor rate. |
| European Union antitrust authorities were not part of those previous settlements and conducted their own investigation. | European Union antitrust authorities were not part of those previous settlements and conducted their own investigation. |
| The agreement marks the first time that American banks Citigroup and J.P. Morgan Chase will pay penalties in the rate-fixing investigations. | The agreement marks the first time that American banks Citigroup and J.P. Morgan Chase will pay penalties in the rate-fixing investigations. |
| Barclays and UBS, which alerted European Union officials to the improper practices, will avoid fines as part of the settlement. Citigroup, which will pay a total of €70 million in fines, also avoided a €55 million penalty by cooperating with investigators. | Barclays and UBS, which alerted European Union officials to the improper practices, will avoid fines as part of the settlement. Citigroup, which will pay a total of €70 million in fines, also avoided a €55 million penalty by cooperating with investigators. |
| The banks that agreed to settle received a 10 percent reduction in the total amount of fines they could have faced, European Union officials said. | The banks that agreed to settle received a 10 percent reduction in the total amount of fines they could have faced, European Union officials said. |
| The fine exceeds a €1.47 billion penalty levied last year against seven companies over collusion in the manufacturing of cathode-ray tubes for computer monitors and televisions. | The fine exceeds a €1.47 billion penalty levied last year against seven companies over collusion in the manufacturing of cathode-ray tubes for computer monitors and televisions. |
| The banks that reached settlements related to Euribor are: Barclays, Deutsche Bank, R.B.S. and Société Générale. The improper activity took place between September 2005 and May 2008, officials said. | The banks that reached settlements related to Euribor are: Barclays, Deutsche Bank, R.B.S. and Société Générale. The improper activity took place between September 2005 and May 2008, officials said. |
| Mr. Alumnia said that the antitrust regulators had opened Euribor investigations of HSBC, J.P. Morgan and Crédit Agricole related to Euribor. | Mr. Alumnia said that the antitrust regulators had opened Euribor investigations of HSBC, J.P. Morgan and Crédit Agricole related to Euribor. |
| The banks that reached settlements related to yen Libor are: UBS, R.B.S., Deutsche Bank, J.P. Morgan and Citigroup. The British broker R.P. Martin also agreed to a fine over Yen Libor. The improper activity took place between 2007 and 2010, officials said. | The banks that reached settlements related to yen Libor are: UBS, R.B.S., Deutsche Bank, J.P. Morgan and Citigroup. The British broker R.P. Martin also agreed to a fine over Yen Libor. The improper activity took place between 2007 and 2010, officials said. |
| The European Union has also opened an investigation regarding yen Libor against the British financial firm ICAP, which has already agreed to pay British and American authorities $87 million related to Libor. | The European Union has also opened an investigation regarding yen Libor against the British financial firm ICAP, which has already agreed to pay British and American authorities $87 million related to Libor. |
| To set the Libor and Euribor rates, banks submit the rates at which they could borrow money, on an unsecured basis, in various currencies and varying maturities. Those rates are averaged, after the highest and lowest ones are eliminated, and that becomes that day’s rate. | To set the Libor and Euribor rates, banks submit the rates at which they could borrow money, on an unsecured basis, in various currencies and varying maturities. Those rates are averaged, after the highest and lowest ones are eliminated, and that becomes that day’s rate. |
David Jolly contributed reporting from Paris. | David Jolly contributed reporting from Paris. |