Dec 04 - The EU has fined six of the world's top financial institutions a record 1.7 billion euros for rigging financial benchmarks. The penalty is the biggest so far of the rate-rigging scandal, and is the largest ever imposed by the EU Commission. Ivor Bennett reports.
Another round of fines for some of the world's biggest financial institutions. This time the punishment came from EU antitrust regulators. Six institutions - Deutsche Bank, RBS, and Citigroup, along with Societe Generale, JP Morgan and broker RP Martin - have been fined a record 1.71 billion euros. Their crime - rigging financial markets. EU Competition Commissioner Joaquin Almunia. (SOUNDBITE) (English) EU COMMISSIONER FOR COMPETITION, JOAQUIN ALMUNIA, SAYING: "What is shocking about the LIBOR and EURIBOR scandals is not just the manipulation of benchmarks - but these are very serious infringement -but also the setting up of genuine cartels between a number of financial players. With today's decision, we want to send a clear message that the Commission is determined to fight and sanction these cartels in the financial sector." The penalty is the biggest yet in the rate-rigging scandal that's uncovered cartels in London, Tokyo and the euro area. Several banks were involved, colluding on interbank lending rates. The benchmarks are used to price hundreds of trillions of dollars in assets ranging from mortgages to derivatives. Despite the record fines, some analysts say the sector is still attractive. Schroders' Jessica Ground. SOUNDBITE (English) JESSICA GROUND, UK FUND MANAGER, SCHRODERS, SAYING: "I actually think they're one of the cheaper sectors. And they are very geared into an uptick in the economy. But you do have to expect these kind of nasty headlines occasionally when you open up the newspapers." The cartels were uncovered after UBS blew the whistle. Along with Barclays, it's managed to escape any fines after helping with investigations. But more penalties are expected. Credit Agricole, HSBC, JPMorgan and broker ICAP are all still under investigation.