Swiss regulators fine banks for rate-rigging

[GENEVA] Swiss competition authorities said Wednesday they had handed eight large global banks a joint fine of nearly US$100 million for creating cartels and rigging international interest rates between 2005 and 2010.

Barclays, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan, Royal Bank of Scotland (RBS), Societe Generale and UBS were hit with fines totalling 99.1 million Swiss francs (S$138.701 million), the Swiss Competition Commission (Comco) said.

Comco, which first started investigating the banks in Feb 2012 for the suspected manipulation of a range of rates, said in a statement it had pursued them through five separate procedures, which today have been partially or totally concluded.

The largest portion of the fine - 45.3 million francs of it - was imposed over the manipulation of the Europe Interbank Offered Rate, or the Euribor rate - a benchmark used to determine the price or interest rate for a range of financial products, including saving accounts and mortgages.

Comco said it had determined that "between Sept 2005 and May 2008, several banks participated, for different durations, in a cartel in interest rate derivatives in euro".

Four of the banks, Barclays, Deutsche Bank, RBS and Societe Generale, had reached an amicable settlement approved by Comco on Dec 5, it said.

Deutsche Bank which along with Barclays participated in the cartel for the longest period - 32 months - received full immunity under that deal since it had revealed the existence of the cartel, Comco said.

Barclays meanwhile took the biggest hit, or nearly 30 million Swiss francs, followed by RBS with 12.3 million and Societe General with 3.25 million, the regulator said, adding that proceedings in the case were continuing against BNP Paribas, Credit Agricole, HSBC, JP Morgan and Rabobank.

The second largest portion of the fine was linked to a cartel aimed at rigging.

Comco said it had concluded "that the two international banks JPMorgan and Royal Bank of Scotland operated, between March 2008 and July 2009, a bilateral cartel with the aim of influencing the Swiss franc Libor benchmark".

Under a deal approved by the regulator on Dec 14, RBS was granted full immunity for having spilled the beans about the cartel to Comco, while its partner in crime JP Morgan was hit with a 33.9-million-franc fine.

A separate investigation meanwhile found that a number of banks had committed "infringements of competition law" related to interest rate derivatives in yen, lasting between one and 10 months, in the period from 2007 to 2010.

Comco said that four of the banks, Citigroup, Deutsche Bank, JP Morgan and RBS, had agreed to pay fines amounting to a total of 14.4 million Swiss francs.

The Comco rulings, which can be appealed to a Swiss federal court, follow similar decisions by the European Commission in 2013 and earlier this month, the statement said.

AFP