Photo (cc) by Damian Gadal
European Union regulators hit six major banks with fines totaling a record $2.3 billion for their roles in manipulating an important interest rate, Reuters says.
If you’re not familiar with the London Interbank Offered Rate, it basically serves as a benchmark for setting interest rates on all kinds of things around the world — including adjustable-rate mortgages, credit cards, student loans and car loans. The video below offers a quick summary of what LIBOR is and how it works.
The banks fined were Deutsche Bank, RBS, JPMorgan Chase, Citigroup, France’s Societe Generale and UK-based brokerage RP Martin, according to Reuters. Deutsche Bank received the largest fine: 725.4 million euros, or nearly $1 billion.
This was the first time American banks have been fined over the scandal, The New York Times says. But they’ll pay only about $200 million combined.
Meanwhile, “Swiss bank UBS and Britain’s Barclays avoided fines of 2.5 billion euros and 690 million respectively for revealing the existence of the cartel,” Reuters says. Both banks have paid other fines to regulators over the scandal already, the Times says.