EU Commission shocked that competing banks were in collusion
The European Commission has fined eight banks – including RBS – a total of £1.4 Billion (GBP) for forming illegal cartels to rig interest rates. The cartels operated in markets for financial derivatives, which are products used to manage the risk of interest rate movements.
A number of banks were engaged in the rigging of interest rate products intended to reflect the cost of interbank lending in euros, while another group fixed prices for products based on the Japanese yen.
The rates are used to set the price of Trillions of dollars (USD) of products, including mortgages.
Some were involved in both markets and more than one cartel, including RBS, which was fined a total of £325 Million (GBP). The fines are the first ever penalties for interest-rate rigging by the EU.Two of the eight banks, Barclays and UBS, were excused paying the largest fines of €2.5 Billion euros and €690 Million euros, because they assisted the investigation and revealed the existence of the cartels’.
Aside from RBS, Barclays and UBS, the other organisations involved were Deutsche Bank, which received the biggest fine of €725.36 Million euros, Societe Generale, JP Morgan, Citibank and the brokers RP Martin.
Banks that have not yet settled fines but are being investigated are HSBC and Credit Agricole, as well as JPMorgan, which accepted a fine for rigging in one market but not another.
Other global authorities have fined financial institutions including UBS, RBS, Barclays, Rabobank and ICAP for manipulating rates. A handful of individuals are also facing criminal charges.
Barclays was the first to be fined along with RBS, which is 81% owned by the UK Government and taxpayers, have already been fined for rigging the price of interest rate products based on the London interest rate market, Libor. Barclays paid £290 Million (GBP) and RBS £391 Million (GBP) for their involvement.
Barclays said it “voluntarily” reported this latest wrongdoing to the Commission and “co-operated fully” with the investigation. UBS has been given the heaviest fine, of £917 Million (GBP), and was also in line for the largest in this investigation, but avoided it by co-operating.
Sir Philip Hampton RBS chairman said “We acknowledged back in February that there were serious shortcomings in our systems and controls on this issue, but also in the integrity of a very small number of our employees. This is another sobering reminder of past failings and nobody should be in any doubt about how seriously we have taken this issue”
European Commission vice-president Joaquin Almunia, who is in charge of competition policy, said: “What is shocking about the scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other. Healthy competition and transparency are crucial for financial markets to work properly, at the service of the real economy rather than the interests of a few.”
So the banks get their knuckles rapped by senior officials, but what about compensating UK taxpayers for the economic hardship these idiots have caused, the ordinary man on the street has been paying through the nose for over inflated financial products just to line the pockets of some other stupid bankers.
The days of people looking out for each other are long gone and competition is being rigged by those in control, how are we ever supposed to be able to trust financial institutions again?
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