All's fair in love, war and banking.
Banks are racing to betray their competitors to avoid possible European Union fines for rigging foreign-exchange markets, according to a person with knowledge of the EU’s preliminary investigation.
Bloomberg reports that lenders are vying to emulate UBS and Barclays, which dodged penalties of about $4.4bn for blowing the whistle on manipulation of interest-rate benchmarks, said the person who asked not to be named because the EU process is private. More banks have volunteered information on currency markets than for the probes into Libor and Euribor rigging, the person said.
With penalties forgiven for the first to snitch and discounts of as much as 50% for the next in line, banks have an incentive to win the race to EU Competition Commissioner Joaquin Almunia’s door. This year’s total for EU price-fixing fines is almost $2.57bn - about half the waived penalties for companies that first blew the whistle in cartel cases.
'If you offer a big enough carrot, i.e. full immunity, then you are likely to get someone to come forward', Stephen Smith, a lawyer at Reynolds Porter Chamberlain in London, said in an interview. 'The reality is that if there any skeletons, they are going to come tumbling out of the cupboard' anyway as part of global investigations. Banks may decide that 'they might as well be first in the queue at the EU', he said.
To access the complete Bloomberg article hit the link below: