EU widens lending benchmark investigation to Swiss franc

The European Union's antitrust regulator has widened its investigation of suspected unfair fixing of lending benchmarks such as Euribor and Libor to interest rate products for the Swiss franc.

Following a recent fine for RBS by US authorities, Joaquin Almunia said the European Commission's enquiries were focused on a number of cases of suspected price manipulation.

“We suspect the existence of cartels between certain actors in the market for derivative products — banks, but also brokers,” he said. “These possible anti-competitive agreements consisting of manipulating rates could have allowed participants to make unfair additional profits on their market transactions.”

In contrast with the bank-by-bank approach taken in the US, Almunia said EU regulators would seek to deal with all suspected cartel participants together. More than a dozen banks around the world have been scrutinised by regulators as part of an investigation into the suspected rigging of interbank rates, which are used to price trillions of dollars of financial instruments.

Euribor, the euro interbank offered rate, and Libor, the London interbank offered rate, are the key gauges of how much banks pay to borrow from peers, and underpin swathes of financial products from Spanish mortgages to derivatives contracts sealed in London.

Both are set using interbank borrowing rates submitted by banks.