Another financial scandal broke out in Europe. European Union antitrust regulators are poised to levy large fines against a group of global banks tied to their alleged attempts to manipulate the euro interbank offered rate, or EURIBOR. The penalties are likely to be in the hundreds of millions of euros for individual banks. Officials from the competition authorities disclosed that such credit institutions like Royal Bank of Scotland, J.P. Morgan Chase, Deutsche Bank, Credit Agricole, Societe Generale, and HSBC were heavily involved in the rate-rigging. The list also included one more major bank, Barclays, which is likely to avoid a penalty due to its extensive cooperation with the EU regulators. It is Barclays’ management who volunteered of the fraud cartel in return for “the act of pardon”. The other financial institutions are given a unique opportunity to get 10% off the penalty amount on condition they have to cooperate closely on the investigation. The European Commission is expected to announce the final resolution in mid-December. Under EU antitrust rules, firms can be fined a maximum of 10% of annual revenue in the most serious cases. The six banks that are currently being inquired raise almost €16 billion annually together. It should be reminded that huge banks have already been involved in similar scheming in order to gain an illegal profit. So, in the period from 2005 till 2009, HSBC, UBS, J.P. Morgan, Deutsche Bank, and several other banks, manipulated the London interbank offered rate, or Libor. The regulators’ decision bound them to pay fines at more than $2.5 billion.
