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Wednesday, December 4, 2013

Fines Handed Out for Libor Scam


European regulators have fined eight major financial firms $2.3 billion for rigging key interest rates, the latest major penalty in a continuing worldwide fixing probe.
 
Two major American banks, JPMorgan Chase & Co. and Citigroup Inc., were among the institutions hit with penalties, which the European Commission announced Wednesday in Belgium. 
“What is shocking about the [rate-rigging] scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other," Joaquín Almunia, the commission's vice president in charge of competition policy, said in a statement 
.Central to the case are key interest rates that help form the foundation of the global financial system. The London Inter-Bank Offered Rate, known as Libor, determines how much banks pay to lend to each other. Trillions of dollars in financial products are pegged to these rates. 
The fines, totaling 1.7 billion euros, were also levied against Deutsche Bank, Société Générale, Royal Bank of Scotland, and RP Martin. Barclays and UBS avoided fines in exchange for their cooperation.

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