EU Seeks Settlement by Year End on Libor-Euribor Rigging Probes

The European Union’s antitrust chief said he’s seeking a settlement with banks implicated in the rigging of Libor and Euribor interbank lending rates.

The EU is seeking to make decisions on its probes into potential rigging “by around the end of this year” using formal settlement procedures, Joaquin Almunia told reporters today in Brussels after he announced the escalation of a separate probe into collusion in the credit derivatives industry.

Global regulators have fined UBS AG, Barclays Plc and Royal Bank of Scotland Group Plc about $2.5 billion in the past year for distorting Libor and similar benchmarks. At least a dozen firms remain under investigation around the world. Probes into potential rigging have expanded beyond interbank lending rates such as Libor to include markets ranging from oil prices to foreign exchange.

The EU is quizzing banks and brokerages in its probe into manipulation of interbank lending rates that may have helped them and others generate profits from derivatives trades.

Almunia has said that manipulating benchmarks such as Libor risks “systemic damage.”

Goldman Sachs Group Inc. and JPMorgan Chase & Co. were among more than a dozen financial institutions accused by the European Union of colluding to curb competition in the credit derivatives industry, Almunia said today.

“Some of the banks” involved in the CDS probe are also part of the investigations into Libor and Euribor manipulation, Almunia said.

“We are exploring the possibility of settlements in these cartel investigations,” Almunia’s spokesman, Antoine Colombani, said in an e-mail. He declined to elaborate.

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