The European Commission has expanded its investigation into possible manipulation of key interest rates such as Euribor and Libor to include interest rate products for the Swiss franc.
EU Commissioner for Competition Joaquin Almunia stated that the investigation is focused on a number of cases of possible manipulation.
“We suspect illegal collusion among certain actors in the financial derivatives market – banks as well as brokers,” said Almunia.
“Thanks to these possible agreements, which undermine fair market competition through interest rate manipulation, the actors could have unfairly gained additional profits on their market transactions,” he added.
U.S. authorities recently imposed a monetary penalty on the British bank Royal Bank of Scotland (RBS) for participating in the manipulation of the London interbank offered rate Libor.
While the United States initiated proceedings against each bank individually, European regulators will seek to encompass all suspects involved in the cartel in a single procedure, emphasized Almunia.
Regulators have launched an investigation against more than a dozen banks worldwide over suspicions that they colluded on key interest rates for interbank loans that affect loans and financial instruments worth trillions of dollars.
Euribor is the interest rate for interbank loans in the eurozone, while Libor is the offered interest rate for interbank loans in the London market. Both reflect the cost of borrowing for banks from other financial institutions and are based on estimates provided by the banks themselves.
