EU Regulators Probing Derivatives Linked to Tokyo Rate
European Union regulators are probing companies involved in trading derivatives tied to the Tokyo interbank offered rate, the region’s antitrust chief said, adding to existing inquiries into two other interbank loan rates.
The European Commission started investigations last year into companies that may have violated antitrust rules by colluding on products linked to Euribor, Libor and specific currencies, EU Competition Commissioner Joaquin Almunia said.
“Any confirmed manipulation of these rates would imply a very significant cost to the European economy,” Almunia said in remarks prepared for a Washington speech today. “Asymmetrical information can bring large benefits to certain market players who have strong incentives” to keep markets opaque in spite of regulatory efforts.
Almunia has made financial markets one of his priorities and said today that he would monitor them with “special care.” In April, he began a probe into Goldman Sachs Group Inc. (GS), JPMorgan Chase & Co. (JPM) and 14 other investment banks over agreements in the market for credit-default swaps that may harm competition. He also vetoed Deutsche Boerse AG and NYSE Euronext’s (NYX) plan to create the world’s biggest exchange after concluding the merger would hurt competition.
In the telecommunications industry, Almunia said, he is still considering whether to open a formal investigation into Motorola Mobility Holdings Inc. (MMI)’s licensing of standard- essential patents “to help bring more clarity into this area.” Apple Inc. and Microsoft Corp. (MSFT) have filed complaints with the EU over Motorola Mobility, which is being bought by Google Inc.
Regulators are wary of telecommunications companies shutting out competitors as new technology is rolled out, Almunia said. Vodafone Group Plc (VOD) and four other European communications companies were questioned this year by the EU on talks over technology standards.
The EU may also take further steps in coming months on investigations over pharmaceutical-patent settlements, Almunia said. The EU opened a probe into Johnson & Johnson (JNJ) and Novartis AG in October and is also investigating Teva Pharmaceutical Industries Ltd. and its Cephalon Inc. unit over possible efforts to hinder introduction of generic medicines.
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