European regulators examine Euribor trading behaviour
European regulators have asked several banks under investigation for possible manipulation of the interbank lending rate Euribor for details of their peers' trading behaviour, three sources said today.
The query is part of a request for information from the European Commission sent to the banks in April, one of the sources said. A first request sent in February focused on the banks' structure and ownership, the sources said.
The EU's antitrust watchdog raided several lenders in October last year, looking for evidence of suspected fixing of Euribor rates in its third investigation into the financial industry.
It had earlier opened probes into credit default swaps and into the London interbank offered rate (Libor). Other regulators around the world are also investigating suspected attempts to rig interest rates.
The Commission, which can fine companies up to 10 per cent of their turnover for breaching the EU's antitrust rules, did not identify the banks in all three investigations. There are 43 banks on the Euribor panel.
The two-page document sent in April contained three questions, said one sources, who declined to be identified because of the sensitivity of the matter. Banks were given three weeks to reply.
"Banks were asked to provide information on their counterparties and their views on the trading behaviour of the counterparties," the source said.
Another question concerned the trading of derivatives, how they are priced and how they relate to the exchange rate Euribor.
Lastly, the Commission wanted to know how changes in one Euribor rate may affect other Euribor rates with different maturities and the inter-relation between them.
The people said more specific questions could follow in the coming months which could indicate the particular areas of concern for the regulator.
EU competition commissioner Joaquin Almunia has said the investigations are a high priority but a source with direct knowledge of the cases said it was doubtful if there would be any decisions this year because of the complexity of the issues.
Last month, Barclays settled with US and British regulators by paying a $453 million fine. It admitted that some of its traders manipulated Libor.
Thomson Reuters Corp is the BBA's official agent for the daily calculation and publishing of Libor. The company said it continues to support the BBA in calculating and distributing Libor rates.