The already battered reputation of banks took an expensive new hit yesterday when the European commission slapped a record €1.7bn (£1.4bn) fine on six firms – including the bailed-out Royal Bank of Scotland – for colluding to fix key interest rate benchmarks.
Joaquín Almunia, the European competition commissioner, warned that further fines were on the cards as three more banks, including HSBC, and one broker have refused to settle the long-running investigation by Brussels.
He revealed that the authorities were in the process of unmasking a fresh scandal in the currency markets that could further damage the industry and add to the vast sums banks have had to pay for their mistakes since the financial meltdown.
“This will not be the end of the story, neither for interest-rate derivatives nor for the manipulation of benchmarks,” Almunia said. “One of the areas where we have received information that we are looking at very, very carefully is forex [foreign exchange].”
The latest fines – the first levied on a financial cartel by Europe since the banking crisis began – take the total penalties for rigging Libor and other key interest-rate benchmarks to £3.5bn.
Research by the London School of Economics (LSE) to be published next week will put a total of £100bn on the costs of misconduct for 10 major banks, including RBS, Barclays and Lloyds Banking Group, in the five years to the end of 2012. That total has now risen by £30bn, according to an analysis for the Guardian by MSCI ESG Research.