Tags: rate | rigging | UBS | Barclays

UBS, Barclays Dodge $4.3 Billion Fines From EU for Rate Rigging

Wednesday, 04 Dec 2013 09:49 AM

UBS AG, Switzerland’s biggest bank, and Britain’s Barclays Plc escaped $4.3 billion in European Union antitrust penalties by being first to inform the watchdog of collusion to rig benchmark interest rates.

UBS, based in Zurich, dodged a 2.5 billion-euro ($3.4 billion) fine, while London-based Barclays avoided a 690 million-euro penalty, the European Commission said in a statement today. It fined six companies a record 1.7 billion euros for rigging euro and yen interest rate derivatives.

Regulators around the world have been probing whether more than a dozen firms, including JPMorgan Chase & Co. and Deutsche Bank AG, colluded to manipulate benchmark interest rates to mask their true cost of borrowing. UBS paid about $1.5 billion to the U.S., U.K. and Swiss regulators last year for trying to rig the London interbank offered rate, while Barclays agreed to pay 290 million pounds ($474.6 million) to resolve the U.S. and U.K. probes into the matter. Barclays’s Chairman Marcus Agius and Chief Executive Officer Robert Diamond left in the wake of the penalty.

The leniency program is the “main and most effective tool to detect illegal cartels,” the Brussels-based European Commission said in a separate statement today.

UBS fell 0.5 percent to 16.62 Swiss francs by 1:53 p.m. in Zurich trading, trimming its gain this year to 17 percent. Barclays declined 2.3 percent in London to 260.10 pence.

Citigroup Cooperation

UBS revealed the existence of cartels in yen interest rate derivatives, such as yen Libor and the Euroyen Tokyo interbank offered rate, or Tibor. The Swiss bank received full immunity for its participation in five of seven infringements the EU uncovered in the period from 2007 to 2010, the commission said. The company declined to comment on the settlement.

Citigroup Inc., based in New York, avoided an extra 55 million-euro penalty for cooperating on one of the yen infringements in which it participated, the commission said. The bank was fined 70 million euros for two other instances.

The cartel on euro interest rate derivatives, such as the euro interbank offered rate, or Euribor, operated between September 2005 and May 2008, the commission said. Barclays received immunity for revealing the existence of the cartel, in which it participated for 32 months, according to the statement.

Barclays said in a statement it voluntarily reported the Euribor conduct to the commission and fully cooperated with the investigation.

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UBS AG, Switzerland's biggest bank, and Britain's Barclays Plc escaped $4.3 billion in European Union antitrust penalties by being first to inform the watchdog of collusion to rig benchmark interest rates.
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Wednesday, 04 Dec 2013 09:49 AM
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