EU : rate-rigging scandal also involves Japan

The EU investigation into a "shocking" interest-rate rigging scandal in the world's biggest money market in London also includes Japan, EU Competition Commissioner Joaquin Almunia said on Friday. "The alleged rate-rigging is a major competition concern," Almunia told a conference on competition here ."This is why we started investigating a number of banks last year for their possible concerted manipulation of (interest rate) benchmarks such as LIBOR, EURIBOR and TIBOR, the Tokyo rate, for several currencies," he said. "The investigations have top priority because this sort of collusion can seriously harm competition worldwide and on our continent in particular," he added. LIBOR (London Interbank Offered Rate) is a flagship instrument used all over the world, affecting what banks, businesses and individuals pay to borrow money. EURIBOR is for the eurozone, and TIBOR is the Japanese equivalent. The LIBOR rate is calculated daily by data provider Thomson Reuters, on behalf of industry body the British Bankers' Association, using estimates from banks of their own interbank rates. EURIBOR is provided by the Brussels-based European Banking Federation, using data from 43 international banks. British bank Barclays was fined £290 million ($452 million, 360 million euros) by British and US regulators for attempted manipulation of LIBOR and EURIBOR between 2005 and 2009. "The story is quite shocking and brings us back to the banking industry's most irresponsible behaviour of the past," Almunia said, referring to widespread criticism of the lenders for pursuing their own interests at the expense of clients in the run-up to the 2008 global financial crisis. The Washington Post reported on Thursday that US Treasury Secretary Timothy Geithner warned about LIBOR manipulation in 2008, recommending to the Bank of England that incentives for bad behaviour be eliminated and that a "credible reporting procedure" be set up. US lawmakers plan to question Geithner and Federal Reserve Chairman Ben Bernanke later this month about the bank-rigging scandal, which threatens to spill over from London to Washington.