Mortgage-holders' case against six banks strengthened in light of record fine for Euribor manipulation
Sunday, December 8, 2013 @ 2:48 PM
SIX banks which have been ordered to pay a record fine for 'manipulating' the Euribor, or Eurozone interest rate, are based in Spain and where their mortgage customers were facing repossession for non-payment, these may now have legal grounds to challenge this decision.
JP Morgan, Citigroup, Deutsche Bank, Royal Bank of Scotland, RP Martin and Société Générale have been hit with a total 1.7-billion-euro fine for flouting EU competition regulations – the highest in banking history.
The European Commission has not confirmed exactly how these entities manipulated the Euribor rate – currently at 0.5 per cent and expected to end the year on 0.25 per cent, but doing so enabled them to 'control' interest rates in other currencies, including the Japanese Yen.
All six banks formed a 'cartel' or alliance allowing them to benefit mutually from their practices, and the level and length of time of their involvement had a direct bearing on the amount of the fine, with Deutsche Bank being ordered to pay 465 million euros for its 32 months in the Euribor cartel and 259 million for a similar alliance with the Yen, whilst Royal Bank of Scotland, which had been involved for eight months, has been fined 131 million.
For the mortgage customer – a total of 6.7 million of them in Spain across all the banks – they may have paid interest rates above the actual level of the market.
And those seeking to have their mortgage contracts rendered null and void on the grounds of inflated interest rates and other 'abusive clauses' will now see their case strengthened in overturning their repossession for non-payment.
Read more at thinkSPAIN.com