Bank offices raided over Euribor probe

BANK offices in London and Europe were raided yesterday in a shock move by European authorities investigating whether the institutions fixed the region’s Euribor interbank lending rate.

RBS and Deutsche Bank were among the major banks raided, according to informed sources, as offices in London and Paris were targeted by European Commission competition investigators.

The Commission is trying to find out whether the 44 banks that contribute to deciding the Euribor rate – the rate that banks use as their benchmark when lending to each other in euros – fixed the price to their advantage.

The Euribor rate is set at the average of all 44 banks’ lending rates and underpins trillions of euros worth of euro-denominated loans and debt instruments.

Banks such as Barclays Capital, Société Générale, BNP Paribas and Santander sit on the Euribor-EBF panel that compiles the benchmark. It denied price fixing.

“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,” said Euribor-EBF manager Cedric Quemener.

The Commission said it had “concerns that the companies concerned may have violated EU antitrust rules that prohibit cartels and restrictive business practices.”

It is the third banking probe this year, after others into control of another interbank benchmark, the London interbank offered rate, and cross-border bank payments.