Wednesday 4 December 2013

insider trading - where is the line of propriety ? part 5

hello,

The European Commission on Wednesday punished eight financial institutions for a total amount of 1.7 billion euros for participating in illegal cartels in the derivatives market. It's about collusion regarding EURIBOR and LIBOR.

"On Wednesday, the Commission decided in two cartel cases in the financial sector. Reached a settlement with eight financial institutions that violated EU antitrust rules, and punished them for these violations. Combined punishment amounted to 1.7 billion euros, the highest penalty that the European Commission imposed a for breach of antitrust rules "- said at a press conference in Brussels, EU Competition Commissioner Joaquin Almunia.

Four banks participated in the cartel on derivative instruments (interest rate derivatives) that are denominated in euros. These were: Barclays, Deutsche Bank, Societe General and RBS.

and

Five banks (RBS, UBS, Deutsche Bank, JPMorgan, Citigroup) and one broker (RP Martin) participated while in bilateral cartels related to derivative instruments denominated in Japanese yen.

In total, the largest punishment accounted for Deutsche Bank, more than 725 million euros.

In relation to the institutions that have not agreed to a deal, are being further investigated. Those who agreed with the EC, received the discount in punishment. Penalties do not pay Barclays and UBS, because the first revealed the existence of cartels Commission. It's just as if I stole a car, confessed to the deed and has not been punished. Total idiocy.

"We found that in a cartel relating to derivatives based on the euro participating banks coordinate among themselves affect the rate of EURIBOR. Discussed also confidential commercial information that should not be discussed with the participants of the market" - said Almunia.

In the case of derivatives based on the banks manipulated the yen JPY LIBOR rates and TIBOR.

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regards,
oscarjp

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