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Switzerland fines banks $96.3 million for rate rigging

Staff Writer |
Switzerland fined a group of global banks for conspiring to rig key interest rates over several years stretching back to the period before the financial crisis.

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The move adds another layer to already significant penalties handed out to banks for manipulating benchmark rates that influence an array of loans and financial products.

The Swiss Competition Commission, which disclosed its investigation of the rigging of rates and related financial products in 2012, said that it has issued a total of roughly 99 million Swiss francs ($96.3 million) in fines to banks including J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLC, Deutsche Bank AG, Citigroup Inc., Barclays PLC, Société Générale SA, and Credit Suisse Group AG.

The commission, known as COMCO, said J.P. Morgan and RBS ran a "bilateral cartel" to influence the Swiss franc Libor benchmark rate, which is widely used by banks to determine on what terms they will lend to each other and to price derivatives, between 2008 and 2009.

RBS received immunity for revealing the cartel and wasn't fined, COMCO said, while J.P. Morgan received a fine of 33.9 million francs.

RBS, Citigroup, Deutsche Bank, and J.P. Morgan were fined a total of 14.4 million francs for colluding to influence the Yen Libor rate and related yen derivatives between 2007 and 2010, COMCO said. The commission said it is continuing a related investigation of banks including UBS Group AG and HSBC Holdings PLC.

Another group of banks were fined 45.3 million francs for manipulating the Euro Interbank Offered Rate, or Euribor.

Deutsche Bank, Barclays, RBS, and Societe Generale participated in a related cartel between 2005 and 2008, COMCO said, adding that Deutsche Bank received full immunity for revealing the arrangement to the commission, and was not fined.

Credit Suisse, J.P. Morgan, RBS and UBS operated a cartel to manipulate the pricing of Swiss franc interest rate derivatives in 2007, COMCO said. UBS received immunity for revealing the cartel and was not fined.

Global banks have already been hit with billions of dollars in fines as a result of probes in multiple countries into interest rate rigging. Tom Hayes, a former UBS and Citigroup trader, was convicted in the U.K. last year for overseeing a scheme to rig Libor, or the London interbank offered rate - a key benchmark.

Several other former brokers were acquitted of related criminal charges.

COMCO said on Wednesday that all of the banks that have been fined as a result of its rate-rigging probe have reached related settlements. The banks can seek to appeal the commission's decisions in federal court.

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