Out of the eleven accused banks in the U.S. antitrust litigation filed by investors for manipulation of the benchmark European Interbank Offered Rate (Euribor) and related derivatives, Barclays PLC BCS became the first defendant bank to resolve the case by agreeing to shell out $94 million in settlement.
Other banks under the radar included BNP Paribas SA, Citigroup Inc. C, Deutsche Bank AG DB, JPMorgan Chase & Co. JPM, Credit Agricole SA, HSBC Holdings Plc, Rabobank BA, Royal Bank of Scotland Group Plc, Societe Generale SA and UBS AG.
The plaintiffs, which included the California State Teachers' Retirement System (CalSTRS), one of the world's largest public pension funds, alleged that the defendants breached the Sherman Act by conniving to rig Euribor and fixed prices of Euribor-based derivatives from June 2005 to March 2011 to their own advantage.
Euribor is the euro-denominated equivalent to London Interbank Offered Rate (LIBOR), an important benchmark that financial institutions use to set the interest rates for lending purposes on numerous financial transactions including credit cards, student loans and mortgages.
Though the settlement requires court approval, Barclays’ initiative to settle the case may persuade other defendant banks to come forward and resolve the matter.
In 2012, Barclays had settled with U.S. and British regulators for manoeuvring of the Libor and Euribor. Also, several major banks have resolved similar rate-rigging charges. While Libor and Euribor manipulations by several banks have been detected by global authorities, we look forward to the gradual resolution of such matters.
Currently, Barclays holds a Zacks Rank #4 (Sell).
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