* Barclays won't be fined because was whistleblower-source
* Some banks agree to settle in exchange for lower fine
* Some banks including HSBC contest proposed penalties (Repeats with byline. No changes to text)
By Foo Yun Chee
BRUSSELS, Nov 5 (Reuters) - EU antitrust regulators are setto fine six global banks including Deutsche Bank,JPMorgan and HSBC for suspected rigging ofbenchmark euro zone interest rates, a person familiar with thematter said on Tuesday.
The penalties, which will also target Royal Bank of Scotland, Credit Agricole and Societe Generale, represent the first punishment meted out by Brusselsin a global probe and represent another costly payout for anindustry struggling to put past misdeeds behind it.
The move comes two years after the European Commission, theEU's antitrust authority, raided a number of banks for suspectedfixing of Euribor, a benchmark used as the basis for pricing 250trillion euros ($338 trillion) worth of financial contracts,from Spanish mortgages to complex derivatives.
Barclays, which alerted the European Commission tothe suspected wrongdoing, will not be fined, the source said.
The penalties only relate to alleged manipulation ofEuribor. Another group of banks suspected of rigging the Londoninterbank offered rate (Libor) could be fined next month, whenthe Euribor penalties are announced, the source said.
Some of the banks had agreed to settle with the Commissionin exchange for a 10 percent reduction in their fines, thesource added.
Several of the banks will not be fined immediately as theyare contesting the size of the proposed penalties. HSBC,Europe's largest bank, is one of those, two sources said. Inthese cases, the banks are likely to face formal charges nextmonth, followed by fines next year, the source said.
Commission spokesman for competition policy, AntoineColombani, declined to comment.
The EU can impose fines of up to 10 percent of a company'sglobal revenue for breaches of antitrust rules. In this case,the fines are likely to be towards the low end of the scale, thesource said. However, since all the banks have revenues of atleast 16 billion euros a year, even a 1 percent fine wouldresult in hundreds of millions of euros in penalties.
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HSBC generated revenue of $63.5 billion last year, whileRBS's total was 25.8 billion pounds, Societe Generale's was 23.1billion euros, Deutsche Bank's 33.5 billion and CreditAgricole's 16.3 billion euros. JP Morgan's revenue was $97billion.
RBS, Deutsche Bank, Societe Generale, JP Morgan and HSBCdeclined to comment. Credit Agricole was not immediatelyavailable to comment.
Authorities in the United States, Britain and elsewhere haveso far fined five financial firms, including RBS and Barclays,$3.7 billion for manipulating Libor and its Euribor cousin.Seven individuals have been criminally charged.
Globally, the cost to banks of cleaning up past misdeeds isexpected to soar to around $125 billion if JPMorgan agrees a $13billion deal with the U.S. Justice Department over its mortgagebusiness.
This earnings season, several banks set aside more money tocover the seemingly relentless rise in the cost of fines,lawsuits and compensation.
Deutsche Bank booked 1.2 billion euros in legal costs in thethird quarter of 2013 alone, wiping out profit for that periodand taking its total legal provisions to 4.1 billion.
EU Competition Commissioner Joaquin Almunia said in April heexpected to issue decisions on the interest rates cases by theend of the year in order to help the market regain confidence inthe benchmarks. [ID:nL2N0CZ1IV}
In addition to Euribor and Libor, the Commission is alsoinvestigating suspected rigging of interest rates linked to theyen (Tibor) and the Swiss franc.
It is also carrying out a probe into credit derivativesinvolving 13 top investment banks including Citigroup,Goldman Sachs, financial data company Markit and theInternational Swaps and Derivatives Association (ISDA).($1 = 0.7402 euros) (Additional reporting by Steve Slater in London, Thomas Atkinsin Frankfurt, Matthias Blamont in Paris and David Henry in NewYork; Writing by Luke Baker and Carmel Crimmins; Editing byDavid Holmes)
Barclays (BARC)
HSBC Holdings (HSBA)
