BRUSSELS, Dec. 4 (UPI) -- The European Commission said Wednesday it has fined eight financial firms $2.3 billion for interest rate manipulation it characterized as collusion.
The commission said in a statement the banks participated in "illegal cartels in markets for financial derivatives." The statement said four of the eight banks colluded to manipulate the Euro Interbank Offered Rate, known as the Euribor, while six financial firms -- including the brokerage RP Martin -- worked together to manipulate the London inter-bank offered rate or Libor, which involves several currencies, including the yen.
Both the Euribor and the Libor are intended to be average the rate banks charge each other for loans. They serve as benchmark rates banks use to set rates for trillions of dollars of personal and commercial loans.
The European Commission said it reduced fines by 10 percent for banks that cooperated early in the investigation, which covered rate manipulation from September 2005 through May 2008.
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The commission said it settled charges of euro interest rate manipulation with Barclays, Deutsche Bank, the Royal Bank of Scotland and French bank Societe Generale.
It settled charges of yen interest rate manipulation with UBS, RBS, Deutsche Bank, Citigroup, JPMorgan Chase and RP Martin.
The commission's strategy is a departure from that of U.S. regulators, who based their accusations on rate manipulation on fraud, rather than collusion.
"Today's decision sends a clear message that the commission is determined to fight and sanction these cartels in the financial sector. Healthy competition and transparency are crucial for financial markets to work property, at the service of the real economy rather than the interests of a few," said Joaquin Almunia, ED vice president in charge of competition.
