The European Commission carried out a series of raids on Wednesday to uncover evidence in a possible case of price fixing involving Euribor, the Euro Interbank Offered Rate.
Reuters reported that the commission, the executive branch of the European Union, has the ability to impose heavy fines if it uncovers evidence of violations. In a series of dawn raids, the commission raided a number of bank offices across Europe, including the London office of Deutsche Bank, in some cases seizing documents.
Euribor is a benchmark rate, used to determine the price of interbank euro loans, that is devised by a committee of 44 contributors by means of averaging the rates submitted by all the committee members. The European Banking Federation hosts the committee. It denied that there has been any attempt at price fixing.
Cedric Quemener, manager of Euribor-EBF, which compiles the benchmark, said in the report, “We are open and prepared to share any data with the authorities.” He added, “We are fully confident in the governance of Euribor. With so many banks involved in setting the rate, fixing a rate artificially would be impossible. I believe the commission lacks knowledge about how those benchmarks are made. We are ready to help them.”
While the commission, which is the antitrust regulator for the 27-member EU, did not identify the institutions whose offices it raided, or the countries in which the investigations were carried out, persons familiar with the action said that Deutsche Bank’s London facilities were among them.
This is not the first major investigation this year into the banking industry. Others concern credit default swaps; the possibility that the London Interbank Offered Rate was manipulated during the last financial crisis, carried out with authorities in the U.S., Europe and Japan; and a look at cross-border bank payments.