Financial monsters, Financial killers. Good for Brussels

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10 Dec 2013 1:36 PM by mariadecastro Star rating in Algeciras (Cadiz). 9419 posts Send private message

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Legal tip 1081. Good for Brussels punishing financial monsters 
10 December 2013 @ 13:34 
 

No other word can describe these entities as monsters.

According to Cinco Días,a  penalty of EUR 1,710 million for manipulating references interest rates has been impossed to Banks by Brussels.

Last  week also European regulators accused the major rating agencies ( S & P , Moody's and Fitch ) about suspected conflicts of interest , lack of rigor and interested leak of  their sovereign debt ratings .

 European Commissioner for Competition , Joaquín Almunia, after announcing the penalty for cartel of five banks ( Deutsche Bank Société Générale , Royal Bank of Scotland , JP Morgan and Citigroup) and a broker (JP Martina ) .  described as " embarrassing " emails that these entities were exchanged for several years to agree Euribor and Tibor , the benchmark interest rate in the interbank market to numerous financial products. "In this case , affected thousands and thousands of customers and millions and millions of people whose mortgage is linked to those references ," said the commissioner.

Killers, I would say.

 The investigation of the EC has concluded that the way Euribor operated between September 2005 and May 2008 , until just four months before the collapse of U.S. bank Lehman Brothers produced a global financial crisis in the euro zone has not yet has recovered . The Tibor cartel lasted from 2007 to 2010. In both cases, according to the Commission , the aim was to distort the formation of the references used for the trading of financial derivatives , an essential tool in banking markets . These references calculated on estimates of the banks themselves , intended to reflect the cost of interbank lending .

Almost all surveyed institutions have accepted an agreement with the European Commission to close the case, which has not freed them from fines of up to 465.8 million euros in the case of Deutsche bank , 445.8 million in the Société General and 131 million in the Royal Bank of Scotland (RBS ), all by manipulating the Euribor .

Furthermore, from the handling of Tibor , RBS will pay 260 million euros , DB , 259.4 million ; JP Morgan, 79.8 million ; Citigroup, 70 million , and RP Martin , 247.000 euros.


With the sanctions , however , financial institutions perch to the list of the 10 largest antitrust fines , which until now were not included . The DB becomes the fourth company to a higher fine , behind other more "traditional " as Saint Gobain , Philips and LG Electronics . And if today the two fines are added, the DB is listed second . The hardness of the EC against the dealer suggests that Brussels takes revenge against the sector.


A sector whose crisis has forced the Commission to authorize within hours hundreds of millions of euros in state aid that would not have accepted or been subject to prior research for years in any other industry.

Brussels wants to punish and restore normalcy  now that most critical moment of the crisis  has passed,  against past excesses .

The shift began last summer when Almunia department issued guidelines on state aid  which made aids to be conditioned to Banks imposing losses on shareholders and creditors, a condition that has hardly been fulfilled during the crisis, except in the case of Spain.

Strong against Floor Clauses..... why are you waiting?

 
 


_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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