The European Commission has fined 8 international financial
institutions a total of € 1 712 468 000 for participating in illegal cartels in
markets for financial derivatives covering the European Economic Area (EEA).
Four of these institutions participated in a cartel relating to interest rate
derivatives denominated in the euro currency: Barclays, Deutsche Bank, Société
Générale, RBS.
The EIRD cartel operated between September 2005 and May 2008. The
settling parties are Barclays, Deutsche Bank, RBS and Société Générale. The
cartel aimed at distorting the normal course of pricing components for these
derivatives. Traders of different banks discussed their bank's submissions for
the calculation of the EURIBOR as well as their trading and pricing strategies.
Interest rate derivatives (e.g. forward rate agreements, swaps,
futures, options) are financial products that are used by banks or companies
for managing the risk of interest rate fluctuations. These products are traded
worldwide and play a key role in the global economy.
Joaquín Almunia, Commission Vice-President in charge of competition
policy, said: “What is shocking about the LIBOR and EURIBOR 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. Today's decision sends a clear message that the
Commission is determined to fight and sanction these cartels in the financial
sector.”