By Foo Yun Chee
BRUSSELS (Reuters) - EU antitrust regulators will impose record multi-million euro fines on six banks including Citigroup, Deutsche Bank and Royal Bank of Scotland on Wednesday for rigging key interest rate benchmarks, sources said.
The sanctions, the first by the European Commission for rate manipulation and expected to top 1.5 billion euros ($2.04 billion), follow hefty fines on top banks for similar offences from authorities in the United States, Britain and elsewhere.
The benchmarks involved in the three cases - the London interbank offered rate Libor, the Tokyo and the euro area equivalents - are used to price hundreds of trillions of dollars in assets ranging from mortgages to derivatives.
JPMorgan and Barclays were also in the group charged with manipulating Libor and the Tokyo interbank offered rate Tibor, a person familiar with the matter said.
The banks admitted liability in return for a 10 percent reduction in fines. UBS alerted the European Commission to the yen interest rate derivatives wrongdoing and will not be penalized.
Deutsche Bank and Royal Bank of Scotland will also be penalized for rigging benchmark euro zone interest rates. French bank Societe Generale is also part of the group facing sanctions for alleged rigging of the rate known as Euribor.
HSBC and Credit Agricole are likely to be penalized next year after refusing to settle the case with the Commission. Barclays blew the whistle on the group and will not be fined.
It was not immediately clear if JPMorgan will be sanctioned for its Euribor involvement on Wednesday or next year. Reuters reported the imminent Euribor fines on November 5.
EU Competition Commissioner Joaquin Almunia is expected to announce the fines for the three cases at 1030 GMT (5:30 A.M. EST) on Wednesday, a second person said.
Barclays, Deutsche Bank, Societe Generale, RBS, JPMorgan and Citigroup declined to comment. HSBC and Credit Agricole were not immediately available to comment.
Commission spokesman for competition policy Antoine Colombani could not be immediately reached for comment.
Authorities around the world have so far fined UBS, RBS, Barclays, Rabobank and broker ICAP $3.7 billion for manipulating rates. Seven individuals face criminal charges.
UBS paid a record fine of $1.5 billion late last year to the U.S. Department of Justice and the UK's Financial Services Authority for rate-rigging. For a factbox on the biggest fines handed down to banks.
EU fines can reach up to 10 percent of a company's global turnover. RBS had a turnover of 25 billion pounds last year, while Barclays was 29 billion pounds. Societe Generale's was 23.1 billion euros, Deutsche Bank's 33.5 billion euros and JP Morgan's revenue was $97 billion.
The current record for an EU cartel fine is 1.47 billion euros for a cartel involved with cathode-ray tubes.
($1 = 0.7360 euros)
(Reporting by Foo Yun Chee, additional reporting by Alex Smith, Steve Slater and Laura Noonan in London, Philipp Halstrick in Frankfurt; editing by David Evans)
- Deutsche Bank
- Royal Bank of Scotland
- European Commission