Bank Systems & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Compliance

11:26 AM
Reuters
Reuters
News
Connect Directly
RSS
E-Mail
50%
50%

Banks, Brokers Suspected in Rate-Rigging, Says E.U. Anti-Trust Chief

Banks and brokers are suspected of colluding to rig benchmark interest rates, the EU's antitrust chief said on Monday, detailing an ongoing investigation into suspected wrongdoing in the financial sector.

Banks and brokers are suspected of colluding to rig benchmark interest rates, the EU's antitrust chief said on Monday, detailing an ongoing investigation into suspected wrongdoing in the financial sector.

"Our concerns are that certain companies, in particular banks, but also some brokers, may have violated EU antitrust rules that prohibit cartels," EU Competition Commissioner Joaquin Almunia told EU lawmakers in Brussels.

Almunia's regulators are investigating illegal manipulation of the Libor rate, which is used as a reference for financial transactions worth more than $350 trillion globally, as well as the Euribor and Tibor reference rates.

British bank Barclays has already been fined for its role in rigging Libor (the London Interbank Offered Rate), and officials have pledged to criminalise the manipulation of such indexes.

"Certain market players have colluded to submit aligned rates in order to benefit their trading positions in these interest rate derivative products, to the detriment of their trading counterparties as well as non-colluding companies," Almunia said.

He added that banks and brokers exchanged information about their trading positions and about their pricing plans for interest rate derivatives, as well as their expectations of future price trends.

Almunia was addressing a European Parliament hearing on the manipulation of interest-rate benchmarks.

Copyright 2012 by Reuters. All rights reserved.

Register for Bank Systems & Technology Newsletters
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.