Dutch Regulators Probe Libor, Euribor Submission Process

By Maud van Gaal on July 27, 2012

 

Dutch regulators are conducting a probe into potential rigging of interbank lending rates, as a global scandal triggered by the manipulation of Libor widens.

“The Dutch central bank is conducting an investigation in the broadest sense into possible manipulation of the Libor and Euribor submission process,” said Kees Verhagen, a spokesman for the Amsterdam-based central bank. The probe is being carried out jointly with financial markets regulator AFM and in cooperation with international supervisors, he said by telephone today.

The central bank declined to say which firms are under investigation. Dutch newspaper Het Financieele Dagblad reported earlier today that Rabobank Groep, the only Dutch bank on the Libor panel, fired four traders in 2008 and 2011 for possible involvement in manipulation of the rate. The bankers, based in London, were suspected of rigging rates to help colleagues boost profit, the paper said.

Rabobank spokesman Hendrik Jan Eijpe declined to comment on the employees. The bank is cooperating with the investigations by regulators, he said.

Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, earlier this month said it suspended two London-based traders as investigators probe the suspected manipulation of benchmark interest rates. The two traders formerly worked at Rabobank, one of at least 12 banks being probed by regulators over allegations they rigged the London and euro interbank offered rates, a person with knowledge of the situation said on July 9.

Rigging Rates

Libor is determined by a daily poll that asks banks to estimate how much it would cost them to borrow from each other for different timeframes and in different currencies. Rabobank last month withdrew from the panels that set Libor in yen, the Canadian dollar, the Swiss franc, the Danish krone and the Swedish krona. It continues to contribute toward Libor in U.S. dollars, euros and pounds.

ING Groep NV (INGA), the largest Dutch financial-services company, is on the panel for setting Euribor, as is Rabobank. Officials at ING didn’t immediately respond to messages left on their mobile phones.

The Dutch central bank started the probe “some time ago,” Verhagen said.

The U.K. and the U.S. are criminally investigating how derivatives traders and rate submitters colluded to rig Libor, and other interest rates. Barclays was fined 290 million pounds ($456 million) in June by U.S. and U.K. regulators for submitting false rates. The lender today apologized for its role in the scandal.