What have you always wondered about the economy? Tell Us
BBC World Service

EU gives big banks $2.3 billion slap over rate rigging

Chris Morris Dec 4, 2013
HTML EMBED:
COPY
BBC World Service

EU gives big banks $2.3 billion slap over rate rigging

Chris Morris Dec 4, 2013
HTML EMBED:
COPY

The European Commission has hit a half dozen big banks, including Deutsche Bank and JPMorgan Chase, with a $2.3 billion fine for colluding to rig two benchmark lending rates that set the price of money between banks  — something on which they were supposed to competing. It’s the largest antitrust fine that the European Commission has ever imposed in a case of this kind.

The European Commission ruled that this group of banks — some of the biggest and best known in the world — essentially colluded to form an illegal cartel to profit from derivatives linked to rigged interest rates. The Competition Commission in Brussels said the most shocking aspect was not just the illegal activity, but that banks that were supposed to be competing with each other were actively colluding to the disadvantage of companies that rely on these interest rates every day.

“The indirect impact is if you’re dealing with a company that relied on those interest rates to do their business, then those companies are getting rates which are not as good as they could have been, then presumably those companies are going to put up prices of some of the products and services which you want to buy,” says the BBC’s Europe correspondent Chris Morris. “So these things do trickle down through the economy.”

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.