Banks brace for €1.7bn EU fines over Libor

It has been reported that some of the world’s biggest banks including Royal Bank of Scotland, Deutsche Bank and Societe Generale are to be fined a record €1.7bn (£1.4bn) by European authorities to settle EU Libor and Euribor rigging allegations.

According to EU officials who have been investigating these claims, several large banks attempted to manipulate yen and euro-dominated Libor rates as part of an international probe.
Both RBS and Deutsche Bank are said to be facing fines for manipulating both rates, whereas other banks will settle claims relating to just one. Previously RBS paid a fine of £390m to close investigations with both UK and US authorities over Libor rigging.

Barclays was the first bank to admit it’s involvement in attempts to Libor rigging and paid a fine of £290m in 2012. As a result of this Barclays has been granted immunity from any fines. However Barclays is not the only one to have been granted immunity, as UBS also confessed to rate rigging. Like Barclays, UBS also settled a number of investigations amounting to $1.5bn 12 months ago with the UK, US and Swiss authorities.

The EU fines would mark the first time that several institutions have settled at the same time. The fines are said to reach up to several hundred million euros each, with further penalties to be decided on the level of each banks involvement in the manipulation, as well as the level of cooperation with EU investigations.

Some banks however, are yet to reach a deal with the EU authorities such as HSBC and JP Morgan who have refused to sign up to the settlement.

Several other countries including Japan, Singapore and Canada have also undertaken their own investigations