EU to hit banks with huge fines over rate-rigging

The European Union is set to impose multibillion-euro fines on banks alleged to have manipulated key interest rate benchmarks Euribor and Yen Libor, the Financial Times reported on its website Tuesday. Royal Bank of Scotland, Deutsche Bank and Societe Generale are ready to pay penalties next month after reaching an agreement with Brussels. JPMorgan, HSBC and Credit Agricole could pay later without signing such an agreement, according to the financial daily. Societe Generale and Credit Agricole both refused to comment on the report when contacted by AFP. The banks who have agreed a settlement can expect a reduced fine Libor and Euribor are estimates of the rates at which banks lend money to each other and are based on estimates provided by a panel of banks. The index is used to set rates on a multitude of contracts and financial products. The manipulation of such indices has already led to significant fines for banks. The scandal erupted last year when Barclays was fined $290 million ($466 million, 339 million euros) by British and US regulators for attempted manipulation of interbank rates between 2005 and 2009. More recently, in late October, the Dutch Rabobank announced it would pay a 774 million-euro fine to settle allegations it manipulated Libor.