Swiss regulators fine banks for rate-rigging

Global banks have been fined for creating cartels and rigging international interest rates between 2005 and 2010

Swiss competition authorities said on Wednesday that they had handed eight large global banks a joint fine of nearly $100 million for creating cartels and rigging international interest rates between 2005 and 2010.

Barclays, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan, Royal Bank of Scotland (RBS), Societe Generale, and UBS were hit with fines totalling 99.1 million Swiss francs, the Swiss Competition Commission (COMCO) said.



COMCO, which first started investigating the banks in February 2012 for the suspected manipulation of a range of rates, said in a statement that it had pursued them through five separate procedures, which have been partially or totally concluded today.

EURIBOR manipulation

The largest portion of the fine – 45.3 million francs of it – was imposed over the manipulation of the Europe Interbank Offered Rate, or the EURIBOR, a benchmark used to determine the price or interest rate for a range of financial products, including saving accounts and mortgages.

COMCO said it had determined that "between September 2005 and May 2008, several banks participated, for different durations, in a cartel in interest rate derivatives in euro."



Four of the banks, Barclays, Deutsche Bank, RBS and Societe Generale, had reached an amicable settlement approved by COMCO on December 5, it said. Deutsche Bank, which along with Barclays participated in the cartel for the longest period – 32 months – received full immunity under the deal since it revealed the existence of the cartel, COMCO said.

Barclays took the biggest hit of nearly 30 million Swiss francs, followed by RBS with 12.3 million, and Societe General with 3.25 million, the regulator said, adding that proceedings in the case were continuing against BNP Paribas, Credit Agricole, HSBC, JP Morgan, and Rabobank.

LIBOR manipulation

The second largest portion of the fine was linked to a cartel aimed at rigging LIBOR, the global commercial benchmark used to peg millions of rate-sensitive contracts and loans around the world.

COMCO said it had concluded that “the two international banks JPMorgan and Royal Bank of Scotland operated, between March 2008 and July 2009, a bilateral cartel with the aim of influencing the Swiss franc LIBOR benchmark."

Under a deal approved by the regulator on December 14, RBS was granted full immunity for having spilled the beans about the cartel to COMCO, while its partner in crime JP Morgan was hit with a 33.9-million-franc fine.



A separate investigation found that a number of banks had committed "infringements of competition law" related to interest rate derivatives in yen, lasting between one and 10 months, in the period from 2007 to 2010.

COMCO said that four of the banks, Citigroup, Deutsche Bank, JP Morgan and RBS, had agreed to pay fines amounting to a total of 14.4 million Swiss francs.

The COMCO rulings, which can be appealed to a Swiss federal court, follow similar decisions by the European Commission in 2013 and earlier this month, the statement said.